Staff Welfare expenses A/C and donation A/C

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Yogesh Motwani (Querist)
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09 December 2023 I was performing an audit in which i noticed that the company has given amounts to employees for sister marriage and for funeral of father or any other family member of the employee eg;-rs5000 for sister marriage of employee X . the company has debited the Donation A/C , should the expenses should be considered under staff welfare expenses?

RAJA P M

RAJA P M (Expert)
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09 December 2023 Yes, Company can be account the expense under Staff welfare. But, the above said reason is not reasonable for accounting.

Yogesh Motwani

Yogesh Motwani (Querist)
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09 December 2023 So the company should treat the amount given to their employees in staff welfare exp instead of donation a/c, the entries should be transferred?

RAJA P M

RAJA P M (Expert)
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09 December 2023 Yes, It will be account as staff welfare expenses and reason should be reasonable. Otherwise if it's account as Donation then it will be disallowed.

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