Cash payment settlement above rs.10000/-

This query is : Resolved

Pradeep Kumar Sarangi (Querist)
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24 April 2019 Dear Expert,
As per IT Act, under section 40A(3) the payment made through cash above Rs.10000/- is disallowed for any expenditures. Can it allowed, If cash payment show in advance (As loan in someones account) and adjustment entry will pass for the same expenditures which is above Rs.10000/-.

Pls. suggest the accounting treatment for cash payment except the payment mode by cheque, demand draft, NEFT etc.

CA AnKiT BoHrA (AB)

CA AnKiT BoHrA (AB) (Expert)
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24 April 2019 you can break the entries with below 10000 in different dates...!!

Pradeep Kumar Sarangi

Pradeep Kumar Sarangi (Querist)
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24 April 2019 Sir,
If I break the entries day wise, then the cash book in my accounts will be affect.

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CA AnKiT BoHrA (AB)

CA AnKiT BoHrA (AB) (Expert)
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24 April 2019 you have to do that... but at the end of the year the cash balance will be same....

It will be tough only if you are maintaining manual accounting records

else system wont have any issues with that

Pradeep Kumar Sarangi

Pradeep Kumar Sarangi (Querist)
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24 April 2019 Can I pass the payment entry with bulk amount above Rs.10000/- as advance & then adjust it day wise Rs.10000/- against advance.
It is allowed or not as per the define section & rules.