Cash vouchers

304 views 5 replies

Gurudas

Start-up

36 Points Joined March 2017

Hello Forum Members, Let us say that I spend Rs. 10 Lakh in a Financial year. Out of that I make cash expenses of say 6 Lakh rupees, with all cash vouchers available. Will the auditor accept this? Generally - In any business - How much can be allowed to be spent in cash , like what percentage ?

Replies (5)

CA Janani

ACA ACS DISA(ICAI)

359 Points Joined May 2008

There are some businesses belonging to unorganised sectors(Eg Labour oriented Job works).

So, an adhoc percentage of cash expenditure is not warranted by any act. If Income tax Act had any word on it, then many would start using it other way.

The income tax act clearly puts forward Section 40A(3)- Disallowances of expenses made without a/c payee cheques.

The cash payment made would be disallowed on the basis of each individual transaction and not on an adhoc basis.

Gurudas

Start-up

36 Points Joined March 2017

Thank you for your reply :-

(1) A more pin pointed question for the Auditors :- While working for your customer, what is the maximum percentage that you have allowed, with all documentation in place? Just put down numbers...

(2) For what reasons would cash vouchers be disqualified....Can we discuss different possible reasons...