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Advance Salary available in Balance sheet

This query is : Resolved 
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(Querist)
26 December 2021 Dear Sir,

From a Pvt Ltd company I have made a Salary payment of around Rs. 6 lac in parts to a single employee after deducting T.D.S in F.Y. 2018-19 from which Rs. 4 lacs was shown as a Salary expense and Rs. 2 lacs was shown as Advance Salary given in that year in the company's Books of accounts.

Can I book this Advance Salary as company's salary expense in F.Y. 2020-21 to reduce Profit.

The counter party has already shown this entire salary amount of Rs. 6 lac as income received in his books of accounts in F.Y. 2018-19 while filing his Income tax return.

Please advise me on this matter.

Regards,
Divyesh Jain
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
26 December 2021 Yes, you can expenses such advance payment no problem.
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DIVYESH JAIN

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DIVYESH JAIN (Querist)
26 December 2021 Ok, Thanks a lot for your reply
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