Reimbursement paid to employee attracts sec 40a(3) or not?

Reimbursement paid to employee by cheque against amount paid by employee in cash to one vendor on same day (Rs 50000) attracts sec 40a(3) or not?
Replies (2)
Quick Summary
This discussion clarifies whether employee reimbursements, specifically when an employee pays in cash and is reimbursed by cheque on the same day, attract Section 40A(3). The consensus is that it generally does not, as the company's payment is to the employee via bank, not directly in cash for the expense. The expense is recorded as paid to the employee, and the subsequent bank payment to the employee settles this. Therefore, the employer has not made a direct cash payment exceeding the limit.

No. It won't. Because practically u will debit the expense or asset (or anything for which ur employee paid) and credit the employee account. Then while paying to ur employee, u will debit employee a/c and credit the bank account. With this accounting in books read with Sec 40A(3), u as an Employer didn't paid or incurred any amount in cash. So there is no prob for u
It will be treated as indirect payment through your employee. As expense bill is in name of company, it will be considered for 40a(3).

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