My Doubt is, if a company creates a salary liability of say rs. 25000 on 7th of November, and pays salary to that particular employee on 8th say 15000 and on 9th remaining 10000 in cash(both times)
05 November 2012
The query is mainly because the section and Rule 6D clearly states that its for payment on a single day, and as the section is included obviously to reduce cash based transaction ,
I doubt if such a good loop hole be left in the law
So i require case law or any such backup to hold strong my case.(i think it should be disallowed, but as cash transaction is not in a single day i also feel i can let this go)
05 November 2012
Section 40 A(3) itself provides that the aggregate payments to the same person, otherwise than by an account payee cheque or draft, DURING A DAY exceeds Rs.20000, this provision applies.Hence in your case, there will not be any disallowance as the each payment on a single day is NOT exceeding the specified limit.
CAclubindia
