Cash payment >20,000/- to capital work contractor (labour)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 June 2014 We Are Paying the Cash to Civil work contractor for work done by him by Labor

Amount is Rs.100000/-

we will pay the cash to contractor then contractor pay to labour, we will receive the bill from contractor tds deducted 1% on Rs.100000/-

It Is Accepted in Single Voucher or Not

CA Jatin Kacha

CA Jatin Kacha (Expert)
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05 June 2014 Dear,

If contractor is issuing invoice to you and you are also deducting TDS then i recommend you to pay by banking channel whatever it is like cheque, Demand draft, online transfer or wire transfer.

if you incur any cash expenses in excess of 20,000/- then you should Pay by banking channel only. otherwise it is disallowed in the Income tax act and you need to pay tax on that along with interest and penalty.