Cash payment of more than rs 20000/-

Dear Sir/Madam

i have a question.

An employee is making payment in cash for more than Rs20000/- in a day, the bill is in the name of the company and the comapny reimburse the same via bank transaction.

Is the following expense allowed?

Kindly send the link if it is disallowed.

Thanks in advance

 

Replies (2)

Cash payments are made by the employee and the same are being reimbursed. It is not the auditee making the cash payments. In the books of the auditee, employee shall be a creditor for expenses and the same are being settled in bank mode. Eventually the expenses are not paid in cash by the entity and hence there cannot be any dissallowance. 

However mention this in the 40A(2) decleration. 

 

Thank you very much CA Reshma

This was indeed helpfull

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