Can cash payment above 20,000 (drawings) be made to the partner of a firm??
7 Replies
Rahul garg
(ca final student)
(89 Points)
Replied 24 May 2013
drawings is a personal nature account.
Babita
(Industrial Trainee)
(106 Points)
Replied 24 May 2013
yes... because it is just a drawings and the firm is not going to claim it in Profit and loss A/c..... only if the amount is claimed as expense then it cant be....
Also for transporters the limit is Rs. 35000
CA Deepak Rathore
(EXPERT)
(281 Points)
Replied 25 May 2013
yeah allowed, as it is not an expense as accordance with section 32 to 37 of Income tax act 1961..
neither firm will claim it in its profit and loss account
Kanika Jain
(Fresher)
(180 Points)
Replied 29 May 2013
U cant debit Drawings as expense in P&l and not able to get tax advantage on it. It is always disallowed irrespective of mode of payment and amount.
Mohammad Asif
(chartered accountant)
(191 Points)
Replied 31 May 2013
it is not an expenditure so sec 40(A)(3) is not applicable.
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