Expenses cash payment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 September 2011 can a private company can made cash payment of salary of 10000 per month for six month. Also if some expenses first paid by directors and lateron paid by company to them in cash exceeding 200000 attract income tax provisions.

if paid in cash what are consequences

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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30 September 2011 Yes cash payment of salary for an amount less than Rs. 20,000/- can be made.

If some expenses have been incurred by directors, and thereafter the company is reimbursing the same,it should be ensured that the cash payment does not exceed Rs. 20,000/-.

Failure to do so will attract the provisions of Section 40A(3) and the expense will be disallowed.

Querist : Anonymous

Querist : Anonymous (Querist)

30 September 2011 as the total salary payment exceed 20000 i.e. rs. 60000 in a year. can the same paid in cash is permissible. please guide
thanks in advance

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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30 September 2011 Individual payments are considered for the purpose of Section 40A(3) and not the total payments.

The salary has been paid in respect of individual wage bills, so no disallowance.

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