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Audit fees of a pvt ltd company received in cash

Pvt ltd 6481 views 10 replies

Hello,

Can a Pvt Ltd Company pay its audit fees to its CA in cash(if it is less than 20000)? Is there any kind of default or inconsistency in the same?

Replies (10)

There is no any kind of default.

no issue. u can take fees in cash.

According to Income tax provision, If the amount is less than 20,000 than u can take fees in Cash 

Provisions relaxed in case payment is below or equal to 20000.

Yes the company can pay audit fees to auditor in cash as there is no provision regarding mode pf payment of audit fees

There is no legal provision which bans for receiving fees in cash. There is no legal implication as regards to the received of the money. 

 

However, at the time of payment, there are restrictions under section 40A(3) of the Income Tax Act. According to the section, there is limit for payment in respect of expenditures per day Rs. 20,000.00 So in case the fees is less than Rs. 20000 then there is no problem as regards to the company also. 

Originally posted by : Amol Gopal Kabra (CA,CS,DISA)
There is no legal provision which bans for receiving fees in cash. There is no legal implication as regards to the received of the money. 
 
However, at the time of payment, there are restrictions under section 40A(3) of the Income Tax Act. According to the section, there is limit for payment in respect of expenditures per day Rs. 20,000.00 So in case the fees is less than Rs. 20000 then there is no problem as regards to the company also. 


Even if it is say 25000, we can receive 19000 on one day and 6000 on the next day. Correct?

Accepted with All

Against a single bill, if the payment is paid in parts on different days, then the limit or Rs. 20000 applies per day and not for aggregate payment of different days.

All are correct. Only one addition. There is no restriction on receiving fees of any amount in cash in single payment or in instalments. The issue will be to the payee. A single payment above 20000 will be disallowable u/s 40(A)(3).


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