Cash salary

But for Income tax  purpose u need to hav supportings that u paid salary in cash to genuine employee..

Yes as for Salary there is No such Provision restricting you payment of Salary in Cash & Disallowance for the same

No such restrictions.....have proper receiving on stamp.

Employee can be paid his salary in cash of any amount.

However, proper deduction of Tax i.e TDS should be ensured otherwise the liability is going to be on  the employer.

Secondly, proper receiving should also be ensured.

Proper signed voucher with revenue stamp.

There is no such restriction. Have proper vouchers with revenue stamps and authorised signatures. But it is much better to pay through bank as proper trail is available.

there is nothing to worry about so long the company does not pay to a person(employee or otherwise) in a day an amount or aggregate of  amounts  exceeding Rs. 20000... it holds good for both private and public companies...however , deduction of tds and maintainance of proper voucher by the company  is  must.

Hi Friends,

I've a scenario here. my friend received the salary in cash from April 2012 - Aug 2013 [ April 2012 - May 2013 is below 20,000. But June and July it is 23,000] and he has relieved from the company by July 2013. Will it be accepted? or Will there be any problem? If so what will be the problem? (for the employee or employer). Now he has got a form - 16 (not e-filed; manual entry since it comes NIL return ) for the same.

Kindly help

Cash salary can be paid but its better to pay in Cheque or NEFT. 

Dear Divya, As per income tax rules such expense can be disallowed only when it increases 20000 but u have to mainatin proper vouchers with signature of employee .

Hope your query is resolved

Originally posted by : Divya Garg

In case of a pvt ltd company can we pay a cash salary of 16,000 INR per month to an employee instead of trasnferring directly to his bank account ?

Employee has got valid PAN card though and file his ITR every year.