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Maximum cash payment in a year

Tax queries 1779 views 14 replies
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How much can i pay to labor controctor in a year through cash . If it is more than 20000/- in a year is it disallowed ? 

 

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On 30 October 2014 at 20:34 Report
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Chartered Accountant
516 Points Posted on 30 October 2014

Hello.

There is provision like you can not pay more than rs. 20000/- to a single party on a day. If you do so, it will be disallowed. Rs. 20000/- criteria is for a day not for a year. 

Thanks.smiley

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On 30 October 2014 at 21:09
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chief Accounts Officer
79 Points Posted on 30 October 2014
Agreed with Abhihek
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On 30 October 2014 at 22:23
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M.Com
23 Points Posted on 31 October 2014
Right 20000 for a day not a year
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On 31 October 2014 at 06:58
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Wealth Manager
5293 Points Posted on 31 October 2014

Yes, you may pay to labour contractor Rs. 20,000/- in cash. It will be allowed. Check TDS provision.

13 Reply
On 31 October 2014 at 09:53
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student
25 Points Posted on 31 October 2014
20000 is for a single day as per section 40A(3)
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On 31 October 2014 at 11:08
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articled assistent
121 Points Posted on 31 October 2014
Per bill per day cash should not exceed rs.20000 and for per year rs.75000...Iif exceeds it will b disallowed..
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On 31 October 2014 at 13:41
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Consultant
35 Points Posted on 31 October 2014
Payment to a contractor above threshold limit requires deduction of TDS. If pan is not available then TDs is required to be deducted at 20% and again if TDs is not deducted (either at specified rate or 20%) the expense is disallowed.. Be careful.. Thx
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On 31 October 2014 at 13:44
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Manager- Finance & Accounts
23 Points Posted on 31 October 2014
20000 in a day and total payment in a year to contractor 75000 if u do not deduct tds
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On 31 October 2014 at 13:50
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Student CA Final
25 Points Posted on 31 October 2014
@ saranraj thangaraj Will it be disallowed if it exceeds 75k in a year It just attracts TDS provisions but not disallowed
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On 31 October 2014 at 13:50
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ARTICLE
25 Points Posted on 31 October 2014
If Cash Payment exceeding Rs. 20000/- made in aggregate in a single day to a party then the expense is disallowed as per section 40A(3) & 3A.
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On 31 October 2014 at 14:20
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student
86 Points Posted on 31 October 2014
CA Amreshji as per sec 40A(3) payment for expenditure in a day to a party shall not exceed rs 20000 otherwise expence is dissallowed under this section. There some special cases mention in rule 6dd where exemption is provided. As per your query you can make payment up to rs 20000 to same labour contractor in a day. Make sure the compliance of sec 194C else expence will be disallowed u/s 40(a)(ia)
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On 31 October 2014 at 14:29
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Accountant
21 Points Posted on 31 October 2014

20000 is for a single day transaction payment to any individual, not for whole year.

Read more at: /forum/maximum-cash-payment-in-a-year-310147.asp#.VFNamDSUdA0

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On 31 October 2014 at 15:21
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Analyst
34 Points Posted on 31 October 2014
Even though cash payment should not exceed more than 20000 in a year for that person. Under 94c tds is applicable for contract if single payment exceeds 20000 or 75000 in a year.
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On 31 October 2014 at 15:49
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ACCOUNT MANAGER
100 Points Posted on 31 October 2014

agreed with Abhishek

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On 31 October 2014 at 16:48


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