15 February 2014
we are 40 crore turnover partnership firm. labour is about 200 to 300 persons work daily in our firm.they are not our daily (permanant) labour. we pay cash to them for processing of material. we pay cash to each person is about Rs.200/- daily. Only by hand work no machenary.In our profit & loss a/c at the end of the year, these charges of total amount is about Rs.1,00,00,000/-. this total amount is cash payment to labour. how to accounting (booked) these charges in accounting books.It is enough to write vouchers below Rs.20,000/-.In incometax department allow or disallow these charges. this charges are, actual have to be paid.it is very important to us. kindly answer what we have to do.
16 February 2014
Daily/weekly/monthly Payments. ------------------------------- You can maintain a register of labourers and get it signed by them against their respective names at the time of payment. At the day end you can debit the total amount of Rs Say 50600/- in cash towards labour charges payment by giving narration as As per Wages Register. . Stick a revenue stamp and get signed over it where ever a single payment exceeds Rs 5000/-, in any case. .
As the payment to a single person does not exceed Rs. 20000/- there is no question of disallowance. .
CAclubindia
