See you can take security cheques and can make an agreement on stamp paper wherein the other person can agree to the debt and 2 witnesses can sign same. 

A promissory note on 100 rupees non judicial stamp.

you cannot  advance money money in cash 

2) The newly inserted section 269ST in the Income Tax Act bans such transactions in cash amounting to Rs 2 lakh or more on a single day, in respect of a single transaction or transactions relating to one event or occasion from an individual.

3)al Section 271DA imposes a penalty equal to the amount so received on the receiver of such cash.

You need to pay the same through a document or mou. You can pay more than 20000/- through cash as it goes against the provision 269 SS of Income tax Act

1. Always get a promissory executed on a stamp paper bearing the signature of the borrower and two witnesses with his photograph pasted with his signature on t.

2. Mention in such Pro note date of lending, date of repayment and rate of interest , if any.

3. if you have no such proof then your hope lies on the mercy of god.

You need to get a promissory note from that person and also a post dated cheque with the amount  of lending mentioned on the cheque.

If there is no proof of on money being lent, then by circumstantial evidences we need to prove the payment being made and file for a recovery suit in the concerned civil court.

First send him a notice mentioning all the facts but don't mention lending , mention has been taken on the ground of treatment , so that you should not come under the money lending business fraud, after notice if he denied then file immediately a criminal complaint for cheating for not giving the money taken, also mention every where transaction was in cash.

Take post date cheque and record the transaction in writing that you have given this much amount in cash without interest and shall be payable on this date and in lieu of security, cheque is given which shall be drawn on due date.

Both parties will sign it and get it notorised.

Enter into a loan agreement at the relevant time of advancing any loan in case.

The above should safeguard you.

You can obtain a promissory note duly signed by the borrower in favor of the lender with two witnesses attesting the signature of the borrower,

you can obtain a loan agreement ion a non judicial stamp paper worth Rs. 100/-,

You can obtain blank cheque duly signed by the borrower without any date but amount to be noted in it.

These precautionary steps would be sufficient to recover the money from the borrower in case of default in loan repayment.

1. As per the information mentioned in the present query, makes it clear that you lend money to him cash and no one was even present at that post of time.
2. In fact, even if someone would have been there then also your case is not as strong as this is the civil nature of case in which documentary evidences are considered to be fit rather than oral.
3. You should now try to at any cost retrieve this thing from the person’s mouth either in call or messages that he owns some money then you can file suit for recovery of money before the civil court of law.