Cash expenses exceeding Rs.20,000

Dear Members,

 

Whether payments made to employee being reimbursement of expenditure for business in excess of Rs.20,000 on a single day is to be disallowed U/s.40A(3) even when the employee has not made the payments in excess of the limit which incurring the expenses.

Regards,

Dharmaraju

Replies (8)
Hello Dharmaraju, In my opinion, ultimately expenditure is paid and booked in Company, therefore expenditure will be disallowed u/s 40A(3) of IT Act.

 NO IT WILL NOT BE DISALLOWED.BUT FOR THIS U HAVE TO ROUTE IT THROUGH IMPREST A/C SYSTEM

Agree with Mr Ritesh, imprest system is generally used for this.

 hey dharmaraju It will be allowed as deduction if expenditure is less then Rs 20000 through imperest system of accounting

I DO AGREE WITH PANKAJ

If an amount of Rs 50000 given by an employer to his employee (For his sister's marriage) in cash  as an advance which is recoverable in monthly installments allowble U/S 40(A)3 of IT Act.

Praveena,

Rs. 50000 given is not a expense. It is advance.

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