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Cash payment exceeding 20000

CA Parul Saxena (CA) (8488 Points)

23 February 2013

Salary paid in cash-14000

Childeren education allowance paid-7000

Total amount booked as salary-21000

whether it is violation of section under section 40(a)

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10 Replies

CA Prashant Gupta (DGM (F & A)) (14068 Points)
Replied 23 February 2013

yes,

becasue full salary is more than 20000

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CA Parul Saxena (CA) (8488 Points)
Replied 23 February 2013

One more thing if salary paid to Mr.X is Rs.15000/- and to Mr. Y is 16000/- and both the salaries were paid in cash on same day now whether is it a violation?

(Guest)

DEAR,

IF PAYMENT MADE FOR ANY EXPENSES OF MORE THAN RS. 20,000/- TO ANY ONE PERSON IN A ONE DAY, THEN IT WILL SURELY BE DISALLOWED,

OTHERWISE THERE IS NOT ANY DISALLOWANCES

CA Parul Saxena (CA) (8488 Points)
Replied 23 February 2013

and what about staff advances if given in cash exceeding Rs.20000

(Guest)

IN MY OPINION,

CASH PAYMENT OF EXPENSES CAN NOT BE MADE TO ONE PERSON IN ONE DAY EVEN THOUGH NATURE OF EXPENSES IS DIFFERENT.

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CA Parul Saxena (CA) (8488 Points)
Replied 23 February 2013

but nature of staff advance is not expenditure although to be adjusted against salary....

CA Prashant Gupta (DGM (F & A)) (14068 Points)
Replied 23 February 2013

in staff advance, it is to be seen that whether the advance was not used in single expense. if that advance is used for many expense and no is more than 20000 then it is allowed

CA Prashant Gupta (DGM (F & A)) (14068 Points)
Replied 23 February 2013

if one person salary is 15000 and other's is 16000. then you can paid both in one day in cash. because you are not paying to same person. So these exp will be treated different exp