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Salary paid in cash above 20000

Yasir (article assistant ) (466 Points)

31 July 2024

can I pay an employee 20000 per month salary in cash

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3 Replies

sabyasachi mukherjee (27574 Points)
Replied 01 August 2024

Not an issue

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prasad Nilugal ( GST Practitioner & Accounts ) (14801 Points)
Replied 01 August 2024

It will be disallowed under section 40A(3) of the income tax act , however you can refer rule 6DD of the income tax rules, it is allowed in some cases as per the rule 6DD .so refer rule 6DD of the income tax rules, and check it is applicable in your case or not .

PARAS CHHAJED (CA Practice ) (1025 Points)
Replied 01 August 2024

Salary is not an exception in Rule 6DD of Income Tax Rules, 1962 and therefore any salary paid to an employee in excess of Rs.10,000 paid in a day is laible to be disallowed u/s 40A(3). However, if the assessee is opting for presumptive taxation u/s 44AD / 44ADA / 44AE then there shall not bes such disallowance.