sasideep reddy alla (2 years of experice as an Accountant) (62 Points)
26 November 2012Dear All ,
Please provide me the Information regarding " payments not to be paid from petty cash as per indian accounting standards " as my MD has decided to give Rs.10000 as Professional Fees to consultant for First & Last Time.
madarapu.sai shravan kumar
(Student CA IPC / IPCC)
(57 Points)
Replied 26 November 2012
mr.sasideep as per my knowledge if accoutanat maintain petty cash no payements should be made to third party. the transaction should be regarding business hold activites
Ranganathan K
(Manager-Accounts & Audit)
(329 Points)
Replied 27 November 2012
Dear Sasideep,
You can very well make cash payment of Rs.10000 to your consultant. As per the Income tax section 40A(3), the amount of cash payment shall not exceed Rs.20000/- to a person/company/firm in a financial year.
Reference below:
Sec 40(A)(3) Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure
With best regards,
Ranganathan.K
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