Payment of salary in cash exceeding Rs 20000/-

Page no : 3

pooja (student) (27 Points)
Replied 07 April 2016

if all the employees salary aggregate exceed 20000 p m and payment is made in cash and we take in p & l by passing entry sal dr to (each employees names cr) then what will be treatment is it also disallowed.for eg

salry a/c dr 56000

to raman 10000

to raees 20000

to anish 17000

to ajay 9000

hary (CA) (116 Points)
Replied 20 May 2016

there are some exceptions for the expenditure in excess of 20,000/- paid in cash like

1. During the bank holidays

2. If employee don't have the bank account

in that case we may pay the salary in excess of 20,000/- even through cash and is allowed .

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

Abhimanyu Dabas (9 Points)
Replied 12 June 2017

Dear Ravi ji,

You gave this reply 7 years back that the salary if above 20000, can be paid in cash, if paid in parts, over a span of few days. Would you still say so? under current scenario when the limit has been revised to 10000 per day and lets say the salary is 50,000 and its paid over a period of 5-6 days