Cash limit for advance to employees

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The discussion clarifies the cash limit for employee advances under UK income tax law. Generally, an advance up to £10,000 can be paid in cash. Paying a larger advance, such as £150,000, may have income tax implications, particularly if not properly accounted for against salary expenditure, potentially leading to disallowance of the balance amount for tax purposes.

Magesh Varadarajan

Magesh Varadarajan (Querist)
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16 February 2022 What is the cash limit for advance to employees as per the income tax

CA Puja Sharma

CA Puja Sharma (Expert)
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16 February 2022 You can pay an advance upto Rs. 10,000 in cash to an employee at a time. Because if you will be adjusting the advance with the salary expenditure in future.

Magesh Varadarajan

Magesh Varadarajan (Querist)
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16 February 2022 If I pay 1,50,000/- pay advance by cash to employee, whether any impact on income tax for the balance amount 1,40,000/- even thou I have deducting by month from the salary expenditure.

Magesh Varadarajan

Magesh Varadarajan (Querist)
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