My firm is a propreitory consulting firm..My queries are
We have been withdrawing cash for paying some service providers. Is there any limit on this ?
Will vouchers suffice as records for the above payments ?
5 Replies
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 04 January 2016
- Cash payment not to exceed Rs.20,000 in a day (in case of plying/hiring/leasing trasnport vehicles Rs.35,000). If it exceeds, then whole amount would be disallowed.
- If payments are made to labourers for labour work, then voucher would suffice, in any other case, invoice is needed.
- Also, if payment exceeds limits specified (for relevant sections on TDS) then tax to be deducted at source. Also PAN is required. If no PAN, then rate of TDS would be higher.
stanley
(Propreitor)
(85 Points)
Replied 04 January 2016
Thanks..Does it mean we can draw cash to the extent of Rs 5 lacs per month with supporting vouchers ?
stanley
(Propreitor)
(85 Points)
Replied 04 January 2016
Thanks..Does it mean we can draw cash to the extent of Rs 5 lacs per month with supporting vouchers ? (Rs 20000 per day X 25 working days)
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 04 January 2016
I guess yes. The more the volume of such transactions, the more the chances of scrutiny. As long as proper documents are maintained, there might not be any issues. Also please ensure the provisions of TDS are met.
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