06 April 2016
During audit of a company,i found that they hire a technician from japan for some work.whatever is his expenditure is reimbursed to him.Now the problem is the expense of flight ticket worthy of rs 50000 approx is also reimbursed to him in cash.Will this be allowed under income tax or not?
07 April 2016
Section 40A(3)(A) provides that any expenditure incurred in respect of which payment is made exceeding 20000 otherwise by account payee cheque, then such expenses shall not be allowed as deduction. in your case 50000 is reimbursed in cash so this expenses shall not be allowed and will be added in income
10 April 2016
And if they reimburse the amount by making n number of vouchers below Rs 20000,then will it be allowed??If no,then what is the solution to this?How can the company save those RS 50000 from taxation point of view.
CAclubindia
