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Sagar Sharma (CA Final Fianance Executive)     26 August 2009

Payment of salary in cash exceeding Rs 20000/-

Hi,

Please let me know that whether an assessee can pay a salary exceeding Rs 20000/- in Cash?  If possible let me know the provisions where I can also see it.



 34 Replies

N.Naveena Maheswara Rao

N.Naveena Maheswara Rao (Assistant manager for accounts)     26 August 2009

 

Revenue  payments exceeding 20000/- should not be paid in cash. Since salaries are revenue in nature should not be paid in cash

RITESH KOTHARI

RITESH KOTHARI (B.COM, FCA, DISA(ICAI))     26 August 2009

 NO, SALARY CANT BE PAID IN CASH EXCEEDING 20000/-.

sudhir

sudhir (acct.mgr)     26 August 2009

salary above rs. 20000/= should not be paid
ashish gupta

ashish gupta ( student)     26 August 2009

NO revenue exp. paid in cash above Rs.20000/- will be allowed

Rajeswari

Rajeswari (emp)     26 August 2009

Hi,

I am Rajeswari,

The question is wether cash payment of salary exceed Rs.20000 , Allowd or disallowed.

This cash payment of salary made by employer. salary payment is a business expenses. The cash payment of salary excced Rs.20000 ,it will be disallowd subject to IT rule of 6DD.

 

pragati singhal

pragati singhal (NOW A FINAL STUDENT)     26 August 2009

As per Rule 6DD no revenue expenditure should exceed Rs. 20,000/- in cash.

So salary can not be paid in cash above Rs. 20,000/-.

CA Suresh kolluru

CA Suresh kolluru (CA,CS,M.com)     26 August 2009

Payment cash should not exceed 2000/-

Ravi Chopra

Ravi Chopra (CA)     26 August 2009

hello,

firstly .. is it 20000 p,.m. or p.a.. if 2000 p.m..i think in order to prevent ourself we can make payments by dividing it.. we can make it in installments.. 20000 is the limit for 1 day.. so payments cud be made either twice in a month.. who says we cant pay a total of 20000 as salary in cash. if the dates are different we can.. according to me!!

secondly. if it is 20000 p.a. then .. think practically who works below 1500 p. m.  almost noone..n this way all employers will have to disallow salary :)). so i think my above opinion should be considered..

example

so wt u say guys??

 

1 Like
N.Naveena Maheswara Rao

N.Naveena Maheswara Rao (Assistant manager for accounts)     26 August 2009

 

whether the payment is relating to per month or for whole year is irrelevent section talks about cash payment at a time should not be made in cash if amount exceeds 20000/-. 

That money may be related to whole the period but it was disallowed.

ya. to avoid disallowance we can show in our books by dividing the amount in different dates.

Ravi Chopra

Ravi Chopra (CA)     26 August 2009

so i m rite in saying if WE PAY IN DIFFERENT INSTANCES. ITS ALLOWED. SO THIS OPTION CAN BE OPTED BY ASSESSES :)

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (FCA DISA Mcom CIFRS & LLB)     26 August 2009

it can not be paid

1 Like
Ravi Chopra

Ravi Chopra (CA)     26 August 2009

so may i knw.. in wt respect i m wrong.. suppose if a employer pys 10000 p m. in cash.. is it dis allowed???

also if u say so... tk example of purchases.. if  a person purchases 10000 rs raw material each month.. in cash.. n yearly his cash prchases will become 12000 in cash.. so will all be disallow??

Ravi Chopra

Ravi Chopra (CA)     26 August 2009

so u mean to say.. every expenses in which aggregate of 20000 per annum paid in cash is disallowed!!!! hey! its hard to digest?? if we divide it on diferent time periods wts the fault... ????

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (FCA DISA Mcom CIFRS & LLB)     26 August 2009

it should be seen as per transaction.....and not aggregate.


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