My company a Govt.Company Planed to pay 50% of the Arrear Pay (Due to pay revision w.e.f 01.04.2007) to his existing employees in the Month of June 2009. The payment per employee is Rs.20000/- plus for each. Whether this cash payment will attrack 40A for no deduction of the entire expenditure of the Company.
Please help this is urgent.
It attracts Sec 40A(3), so u should pay by a/c payee cheues..
Yes, it attracts the provisions of sec.40 A(3). The whole payment, if made will be Disallowed. The payment should be made by Account payee cheque or Account Payee Demand Draft.
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