Cash advance payment exceeding rs. 20000

Tax queries 2047 views 10 replies

Cash payment made to the employee more than Rs. 20000 for making payment for Road Tax of New Vehicle. Is it disallowed under IT Act.

Replies (10)

u wil make the entry on the name of employee .. or the vehicle is owned by the company and payment is for this only...

 

Because staff advance exceeding 20000 will attract section 269SS and 269TT

In case of New Vehicle, the registration work is done by Vendor/dealer, why should the payment would go in hands of employee? 

also it is not clear with the query that vehicle is in name of employer company or in name of employee?

However its always to be kept in mind that during such payments copies of document should get attached with the voucher, so that at the time of audit or assessment, it should get relief from tax burden 

 

 

If it is given as a loan to the employee, then Section 269SS will apply. If not, then section 40A(3) since it will be a salary expenditure in that case.

It is purely related to capital asset. The amount of road tax paid while buying vehicle is for life time and it must be capitalised. You can pay 20000 rs or more for buying capital asset. Paying to employee does not matter in this case.

AGREE

 

Accordign to Section 269 SS there is a prohibition on acceptance of loan or deposit in cash  by a person and Section 269 T talks about the repayment of the same. As such as per my opinion advance given by the company is neither covered by Section 269SS nor 269T. Yes the matter cah be analysed form the point of the employee. 

Vivek do check sec 269 SS and TT once again... it hits loan to employee in cash above 20000

Please go the followin glink and read the article -

https://www.topcafirms.com/index.php/white-paper/6188-taking-or-repayment-of-loan-in-cash-analysis-of-section-269ss-or-269t

 

Thanks to rahul....

Agree with Vivek Sir but, is any limit for giving cash advance to debtor or employee ?


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