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Reimbursement to employees

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(Querist)
26 November 2020 Whether the reimbursement to employee by way of proper banking channel be disallowed as an expense if original payment by employee was made in cash exceeding INR 10,000?

What if in the above case, payment was made to govt. or any municipal corporation, where they do not accept payment by any mode other than cash?
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A.S.SUNDARARAJAN

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A.S.SUNDARARAJAN (Expert)
27 November 2020 if the company reimbursed to employee for the expenses , the following points to be seen.

1. whether for one bill or multiple bills.
2. Whether for single vendor or multiple vendor

If reimbursement is made to employee for payment made by him by cash for single account head or single vendor, it will be disallowed. It is immaterial whether your are settling reimbursement through banking channel

As far as Government payment in cash is concerned it is allowable. There is specific exemption for payment in cash for more than Rs.10000. One of the exemption is for payment to Government .
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