Cash Payment of above Rs. 20000 in one day

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 September 2010 I need to make the payment of Rs. 65000 to a party in cash in a one day agst a single invoice. so I made a entry of Rs. 20000 in my account books as directly cash paid to party and for the remaining amount, in my books, I have shown that I made equal payments to my three employees and they have paid the party on my behalf.

Now I want to know whether I have done the right thing?

Please help me out in solving my confusion.

Dear All,

I am very curious to know your opinion on this point, so mail out at the earliest what you think is right.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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23 September 2010 My view,
It will be considered aggregate payment more than Rs,20000 only and sec.40A(3) will apply

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
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24 September 2010 Section 40A (3) payment in excess of Rs 20,000

Dis allowance shall be made at the rate of 20% in respect of payment made in excess of Rs 20,000/- towards expense incurred and claimed as a deduction otherwise than a crossed cheque or demand draft.

This provision shall not apply in respect of expenditure for which no deduction is claimed.

What entry you had made while you making the payment?? Is it salary or what??

I hope you have issues of payment in excess of 20,000/- since you had done a single purchase entry that too ready paymetn basis.

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