allowed expenses

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 September 2010 SIR most of my income come from engineering and technical profession.My profession comes under tax audit perview.Some of my projects works are conducted far away from my city.In order to meet the day to day expenditure there, i regularly give account payee cheques in the name of my employees working there.The amounts are very big in comparisition to my business.The employees working there draw those amount from their account and spend for the business there.Will giving cheques in the name of emploeyees dissallow those expenses for me or it will put my employees into trouble under the income tax law.

mohinder kansal

mohinder kansal (Expert)
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18 September 2010 in such circumstances money can be paid to employees who are responsible for supervising the business in those locations who can pay the same for different expenses etc. incurred there. the same can be debited and credited to employee's imprest account who will submit the details alongwith evidences of payment. care may be taken that in these accounts only amounts relating to the business of the company may be deposited. many business entities are doing in the same way.

CA. C.N.PATIL

CA. C.N.PATIL (Expert)
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19 September 2010 THESE AMOUNTS ARE PAID IN FORM OF ADVANCE TO EMPLOYEES , FOR EXPENSES TO B INCURRED , & ULTIMATELY THESE A/C'S ARE CLOSED AS & WHEN THEY GIVE DETAILS OF EXPS INCURRED FOR VARIOUS BUSINESS EXPS , HENCE THERE IS NO SUCH PROBLEM TO UR EMPLOYEES.

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