Causal labour

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Yes, employers can pay casual labour in cash, particularly for daily wage earners or those in remote areas without bank accounts. However, to ensure the payment is tax-deductible, the cash payment per day should not exceed £10,000, as per Section 40A(3) of the Income Tax Act.

Sanjay Powar

Sanjay Powar (Querist)
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21 April 2025 Sir,

Please guide me for whether cash payment for causal labour is allowable or not?
what is the cash limit? how much causal labour

Thanks & Regards.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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21 April 2025 The employer can pay wages in cash to daily-wage or casual workers, especially when the workers may not have bank accounts or in remote locations.
As per Section 40A(3) of the Income Tax Act:: If casual labour are paid daily wages in cash, the payment per day should not exceed Rs. 10,000 to avoid disallowance of tax deductions.

Sanjay Powar

Sanjay Powar (Querist)
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21 April 2025 thank you sir for your valuable suggestion

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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21 April 2025 You are welcome.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 September 2025 Good luck.....

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