Preferential payments u/s 530 ?

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CA Sahil Singla.. (Querist)
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03 September 2011 Sir

Both Sec 529A & Sec 530 talks about dues of workmen of Company. But that is the difference between the two ?

How can one know that a particular amount due to worker is covered u/s 529A or 530 ?

Hari Beldona

Hari Beldona (Expert)
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03 September 2011 In the winding up of a company preferential payment is to be made like taxes,cess rates due by the company to central government or state government or local authority in priority to all other debts. This is elucidated in section 530

Section 529A is overriding preferential payment (that is of workmen dues etc)

It means Section 529A is superior to section 530 in layman's language.

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CA Sahil Singla..

CA Sahil Singla.. (Querist)
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04 September 2011 Thnaks. SIr.
So, it can be said that though payment is made to employees as per Sec 529A to the extent of Secured with secured creditors, after that remanining left Workmen dues comes under 530.

Hari Beldona

Hari Beldona (Expert)
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04 September 2011
Mr Singla
Employee covers even workman after that taxes due to the government etc will come subsequently. Please read both sections carefully you will notice the difference and understand crux.
Wish you good luck.

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CA Sahil Singla..

CA Sahil Singla.. (Querist)
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04 September 2011 Ok Sir. Thanks for the support.

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