LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

Cash salary

Divya Garg (Director) (178 Points)

06 July 2013

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.

Reply
Follow
Share

12 Replies

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 06 July 2013

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

1 Like

Akash (CA Final (2nd Group Pending)) (876 Points)
Replied 07 July 2013

There is no sections of I Tax Act prohibiting the payment. The expense will not be disallowed as it doesn't exceed 20000.Yes you can pay the employee.But it is better to pay by bank as proper trail is available.

1 Like

CA Sunayana Kocchar (Practice) (35 Points)
Replied 07 July 2013

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

2 Like

CA-AK (CA) (600 Points)
Replied 07 July 2013

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

1 Like

sanjay singhal (CA) (987 Points)
Replied 07 July 2013

Yes salary of rs 16000 can be paid in cash. Receiver sign should be taken on cash payment voucher with revenue stamp.

1 Like

Lokesh (CS professional) (493 Points)
Replied 08 July 2013

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.

1 Like

CA. Kunal Lakhotia (ACA) (1006 Points)
Replied 08 July 2013

Proper signed voucher with revenue stamp.

Nimish Jain (Internal Auditor/CA final student) (240 Points)
Replied 08 July 2013

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.

AKLESH KUMAR GOIT (article) (36 Points)
Replied 08 July 2013

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.

Bee Bee (Executive) (23 Points)
Replied 13 June 2016

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

CA.Vinita Gupta (Deputy Manager- Finance) (2918 Points)
Replied 20 August 2016

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

ACA Anurag (Enjoy the little things) (14706 Points)
Replied 21 August 2016

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.