Vignesh (Finance executive) (256 Points)
11 June 2018We are in contraction field.in our office the majority of expenses are meet through site advence payment to employees.we made a payment to employee and he will meet the expensess.majority of our expenses is through site advances only.any income tax issue will araise this type of transaction?
Ram Agrahari
(250 Points)
Replied 11 June 2018
If there are adequate supporting the expenses incurred than there is no Income issue.. Hope the said transactions are not in cash because there is threshold limit of 10000 for claiming expenses in cash as per the I. T Act.. Further please ensure theat the expenses incurred do not attract TDS liability which otherwise would have deducted had the expenses were incurred by the company instead of Employee.. viz., the advances taken by the employee are spent towards the payment of professional fees which would have been liable to TDS otherwise.. in that case while booking the expenses the company has to deduct the TDS and pay to dept. which may be a additional hit to the company.
CAclubindia
