cash payments
This query is : Resolved
14 July 2010
i'm doing audit and found lots of cash payments more than 20000 in a single day. how to adjust these cash payments or action should be taken?
14 July 2010
Adjustment may not possible, under sec.40A(3)in Income tax the same expenses will be disallowed
14 July 2010
First
See whether these payments are made to a single party in same day or not.
Second
See the date of payment, whether bank holiday or not.
Third
See the voucher, for same expenses or not.
Then
When you confirm all these facts and found the payment is higher than Rs 20,000in cash, note it down.
If you are an Internal Auditor,
Give it a lack of tax management lacuna and report after discussing with the management.
If you are a Statutory Auditor
Show these notes to your boss / Principal and sit for discussion with management.
The next Process, you 'll learn by your own.
See whether these payments are made to a single party in same day or not.
Second
See the date of payment, whether bank holiday or not.
Third
See the voucher, for same expenses or not.
Then
When you confirm all these facts and found the payment is higher than Rs 20,000in cash, note it down.
If you are an Internal Auditor,
Give it a lack of tax management lacuna and report after discussing with the management.
If you are a Statutory Auditor
Show these notes to your boss / Principal and sit for discussion with management.
The next Process, you 'll learn by your own.
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14 July 2010
Get thorogh about Section 40 A (3)and Rule 6DD of Income TAx Act, 1961 and Income tax Rules,1962 respectively before concluding any point.
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