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Cash payment exceeding 10,000

Khushboo (article assistant) (284 Points)

06 September 2019

whether cash given as imprest to employeee exceeding Rs. 10,000 falls under the disallowance provision of sec 40(A)(3)?

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5 Replies

Manikanta juluri (Student) (252 Points)
Replied 06 September 2019

section 40(A)(3) of Income Tax Act provides any experience incurred in respect of which payment is made in a sum exceeding Rs10,000/- in a single day is disallowed.

sabyasachi mukherjee (25963 Points)
Replied 06 September 2019

this is imprest cash.
now from imprest cash if u pay rs.20000

Ajit Hegde (CA - Final) (1367 Points)
Replied 07 September 2019

Cash given as imprest doesnt come under disallowance. But if the employee spends more than 10,000 in cash for a single payment then the disallowance is attracted.

sabyasachi mukherjee (25963 Points)
Replied 07 September 2019

Sec 40(A) 3 disallows expenditure paid in cash over Rs.20000.
If u pay from imprest cash that is also disallowed .
That hits the ledger....
Ajit read the provisions .

Ajit Hegde (CA - Final) (1367 Points)
Replied 07 September 2019

First of all, its 10,000 not 20,000. Disallowance is attracted for 'payment from' imprest cash. Not for 'payment to' imprest. Paid to employee for imprest in itself is not an expenditure. It is given for them to spend for any expenditure, for which a bill will have to be produced on incurring the expense.