Sir/ Madam,
for eg. Mr.A - did a job under contract (Building white wash) in a Ltd. company for Rs.25000/-.As per his statement, he has no Bank Account. & PAN No.
Now he wants payment by cash.
1.Whether the company can make cash payment after deducting TDS or not.
2.Under Sec. 44A of IT Act. the company's are not paying cash more than Rs.19,999/ in single payment.
May I know ,what is the reason.
If you make cash payment it will be disallowed as an expenditure u/s 40A(3)
Dear,
with reference to your quary, we understand that company should not award contract to any contractor who doesnot have PAN & bank A/c.
Further u cannot paid more than Rs 20000/- to single contractor in a day asper I.tax Act 1961 under section 40 (a)(3). if exceed the aforesaid limit than all amount will be disallowed by assessing officer during the time of scrutiny or your auditor will also object for the same.
Nilesh
nilesh.coudhary @ ril.com
Is their any possiblities to Break the payment in two or three installment to get relief from sec40 A(3).?
YES IF THE PAYMENT MADE IN TWO - THREE PARTS ON DIFFERENT DATES THE EXPENDITURE SHOULD NOT BE DISALLOWED BY IT.
BUT TDS LIABILITY IS STILL THERE AS ONE TIME BILL AMOUNT IS CROSSED 20000/- LIMIT
Dear Sir,
We have paid Telephone, electricity bill , & Salary paid to Staff in cash , any objection
xcvxcv
ADY & CO.
New Delhi
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