Cash Payment Allowability

Whether cash payment of more than Rs.10,000 made as "Employee Advance" will be allowable ?
Replies (6)
As it is not an expenditure falling under 40A(3), it's allowable. No issues. Don't worry
Employee Advance is not applicable in Sec 40(A) 3.
It is a seperate ..issue altogether.
Tarun, payment of advance to employee in cash upto 20000/- is okay.

If more, than 269SS will apply to Employee and subsequent penalty.(100% )

So take care.
3] Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, or use of electronic clearing system through a bank account 39[or through such other electronic mode as may be prescribed], exceeds ten thousand rupees, no deduction shall be allowed in respect of such expenditure.

section 40A(3) speaks about any expenditure... so if the assessee treats the advance salary as expenditure and claimed it as deduction in p & l account, then 40A (3) is squarely applicable.

moreover, instead of claiming it as expenses if the assessee shows the same as asset in balance sheet and later adjust the same towards salary expenses section 40A (3A) will attract.
correct me if I'm wrong
How much cash sell allow to one day to one person

any record required for cash sell
A person can accept CASH RECEIPT upto Rs. 1,99,999 in a single day from 1 person. If CASH RECEIPT of Rs. 2,00,000 or more is involved, then 100% Penalty imposed u/s 269ST of the Income Tax Act 1961.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
02 November 2026
Audit Executive

SRJP & Co LLP

Kochi

CA Inter

View Details
Company
15 October 2026
Senior Accountant

Continental Belting Pvt Ltd

Mumbai

B.Com

View Details
Company
10 November 2026
Direct Tax Manager

CAAQ CONSULTANCY PVT LTD

New Delhi

CA Final

View Details
Company
Featured ARTICLESHIP 31 October 2026
CA Articleship

apricus india

Navi Mumbai

CA Inter

View Details
Company
ARTICLESHIP 20 October 2026
CA ARTICLE

AMKN & CO

Noida

CA Inter

View Details
Company
ARTICLESHIP 28 October 2026
Article assistants

Shyam S Gupta and Company

New Delhi

CA Inter

View Details
Company
31 October 2026
Accountants

sankaran and krishnan

New Delhi

B.Com

View Details
Company
Featured 07 November 2026
Paid Assisstant

DPV & Associates

Chennai

CA Inter

View Details