Staff Advance

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 January 2011 Hi, Happy New Year 2011.

Can any body tell me whether the payment of staff advance in cash amounting to Rs. 50000 (which will be adjusted from his/her salary over the period of 50 months) is disallowed or not under Income Tax Act.

Regards

Dulal

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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03 January 2011 Disallowed,

If no banks is available in that area, allowed.

Vivek Raju P

Vivek Raju P (Expert)
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03 January 2011 Disallowance u/s 40A(3)is applicable only in case of payments for expenditure and the act is clear. The staff advance in cash is not an expenditure. Hence it will have to be allowed. Disallowance is not attracted in this case.