Advance to Creditors

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1 Points Joined March 2025

what is the reporting point in case of advance payment made to creditors in cash? is there any limit? what will be reporting points as per 3cb-3cd?

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On 05 March 2025 at 12:38 Report
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Master in Accounts & high court Advocate
9150 Points Joined December 2011

Regarding reporting points for advance payments made to creditors in cash, I'll address your queries: Reporting Point: - *Section 40A(3)*: As per Section 40A(3) of the Income-tax Act, 1961, cash payments exceeding ₹10,000 to a single person in a day are not allowed as a deductible expense. - *Reporting Requirement*: Cash payments made to creditors exceeding ₹10,000 in a day must be reported in the tax audit report (Form 3CB-3CD). Limit: - *₹10,000*: The limit for cash payments to creditors is ₹10,000 in a day. Exceeding this limit may attract disallowance under Section 40A(3). Reporting Points as per 3CB-3CD: - *Particulars of Cash Payments*: Report cash payments exceeding ₹10,000 in a day to a single person in Part A of Form 3CB (Clause 19) or Form 3CD (Clause 26). - *Details of Payments*: Provide details of payments, including the date, amount, and name of the payee. Additional Requirements: - *Maintenance of Records*: Maintain proper records of cash payments, including vouchers, receipts, and other supporting documents. - **Com

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On 05 March 2025 at 12:45


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