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R SRIDHAR (Querist)

12 November 2011 Can the employer give advance to employee for travel & other expenses above Rs.20000 in cash. If no, whether cheque in his name is the only alternative? Whether it will affect his personal income tax.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

12 November 2011 In case the employee withdraws the sum from his bank account and utilises for the purpose, his employer can specify the said
allowance as exempt in Form 16 as well.
.
As such it will not have impact on personal income.

CMA Ashutosh Kumar Gupta

CMA Ashutosh Kumar Gupta (Expert)

12 November 2011 advance against expense or travelling, etc. is a payment and except under the circumstances specified in Rule 6DD it should be restricted below Rs.20k on a single day transaction, its' not the personal income to the extent against expense or TA but not as salary or other income. The alternative other than cheque or DD is to do the same by way of bank transfer or payment in two different dates/days and not on a single day or single employee name.

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