Advance to Creditors

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?

Replies (1)

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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