banner_ad

Cash Payment u/s 40a

Tax queries 601 views 3 replies

Dear Colleagues,

Our company is a engineering company. There is a practise that company will deposit cheque in the a/c of employee for expense and local purchase to be done at site. Than the concerned employee pays cash to contractors as an advance payment and also does purchases in cash exceeding Rs. 20K in a single day. The company at HO will directly debit either contractor's account or purchase account and credit employee account.

Pl. let me know, whether this will be disallowable U/s 40a(3) even though company pays by cheque to employee but employee does payment in cash.

Replies (3)

Employee is spending the money on behalf of the company i.e. in the capacity of an Agent, hence 40A(3) will be applied for cash payments made by the employee on behalf of the Company.

Almost all yhe companies are deposit cheques into the account. this practise has been following from many years and always been followed.

 

Term Papers

Since the company directly debits the contractor's account, 40A(3) will be applicable.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
23 May 2026
Article Assistant

Geeta Manchanda & CO.

New Delhi

CA Inter

View Details
Company
23 May 2026
Account Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
26 May 2026
CA / MBA (Finance) / CMA / M.Com (Finance)

Sri Aurobindo Gnostic Centre of Education

New Delhi

CA

View Details
Company
26 May 2026
Senior Accountant cum purchase Manager

Vardhaman Group of India

Pimpri Chinchwad

CA Inter

View Details
Company
22 May 2026
Sr. Financial Analyst - Consolidation

Search Synergy

Mumbai

CA

View Details
Company
09 June 2026
Accounts Associate

S Madan and CO

New Delhi

Graduate (Any)

View Details
Company
29 May 2026
Company Secretary - Part time

Shaswat initial support private limited

Ahmedabad

CS

View Details
Company
12 June 2026
Accounts & Taxation Executive

Winshine Financial Services

Mumbai

CA Inter

View Details