L KANAGARAJ (Assistant Manager-Finance) (615 Points)
25 July 2008Sir/ Madam,
for eg. Mr.A - did a job under contract (Building white wash) in a Ltd. company for Rs.25000/-.As per his statement, he has no Bank Account. & PAN No.
Now he wants payment by cash.
1.Whether the company can make cash payment after deducting TDS or not.
2.Under Sec. 44A of IT Act. the company's are not paying cash more than Rs.19,999/ in single payment.
May I know ,what is the reason.
S.Srinivasaraghavan
(Chief Financial Officer and Co)
(11318 Points)
Replied 25 July 2008
If you make cash payment it will be disallowed as an expenditure u/s 40A(3)
Nilesh Choudhary
(Service)
(27 Points)
Replied 26 July 2008
Dear,
with reference to your quary, we understand that company should not award contract to any contractor who doesnot have PAN & bank A/c.
Further u cannot paid more than Rs 20000/- to single contractor in a day asper I.tax Act 1961 under section 40 (a)(3). if exceed the aforesaid limit than all amount will be disallowed by assessing officer during the time of scrutiny or your auditor will also object for the same.
Nilesh
Shaik Ahmed Hussain
(Auditor)
(46 Points)
Replied 29 July 2008
Is their any possiblities to Break the payment in two or three installment to get relief from sec40 A(3).?
Kailash Mourya
(Accountant)
(62 Points)
Replied 31 July 2008
Dear Sir,
We have paid Telephone, electricity bill , & Salary paid to Staff in cash , any objection
CA Nikhil Mittal
(Manager (Audit))
(77 Points)
Replied 04 August 2008
CAclubindia
