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)

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)

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)

21 April 2025 thank you sir for your valuable suggestion

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

21 April 2025 You are welcome.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

28 September 2025 Good luck.....

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