Hi, hello, how are you all?
I hope you are doing well.
Sir, do you remember the last lecture?
You must remember something.
What were we doing in the last lecture?
In the last lecture, I talked about the third fail where
you got us a salary of 1 crore.
In that case, the expenditure was disallowed.
How much? As much as it was excessive.
You will disallow the excessive one, but if you are paying
it according to its capability, to the specified person,
then it was allowed.
I would like to focus your attention on a very important
section, friends.
It is a very important section.
In this topic, my question to you in every lecture is that
what is the objective of a businessman?
The objective is to claim as much expenses as possible.
To show as much expenses as possible.
Do you understand?
For example, a businessman has earned in cash.
He has some income in cash.
For example, he has cash with him.
Now, what does he do?
He has to take expenses.
What will he do?
He will show an expense of Rs. 50,000 in cash.
He pays Rs. 1,00,000 in cash. He pays Rs. 3,00,000 in cash.
He pays Rs. 4,00,000 in cash.
He shows an expense of Rs. 1,00,000 in cash.
Suppose, it was a profit of Rs. 1,00,000.
He shows an expense of Rs. 1,00,000 in cash.
He shows it directly.
Who are you? Are you my vendor? What have I done to you?
Have you bought goods? Here, take Rs. 1,00,000 in cash.
Keep the old balance.
Take Rs. 1,00,000 in cash in one day.
If this starts happening,
there will be no accountability for things.
Because cash will be in circulation.
No one will know what the source is and where the cash has
come from.
The person who is giving the cash, how did he get the cash?
If you look at the economic condition of the country for
the last 2-4 years,
If you look at the economic condition of the country for
the last 2-4 years,
the paytm and phone payments, their objective is to make
the economy cashless.
Payments may be through debit, credit, or UPSC.
The government itself has the same objective.
The government we get our own apps.
The government's objective is make a cashless economy.
And for this same example,
the government has taken a step the government has taken a
step which is, my dear, if you want to pay the expense and
claim the interest,
We don't have any problem with that.
My dear, we really don't have any problem with that.
If you want to claim an expense, then...
But the condition is, my dear, listen carefully, that for a
single person,
for a single person,
in a single day,
how much maximum cash can I spend?
Suppose, a plumber comes to my house, he has done so much
work, that he has got a billing of Rs.
And his problem is, my question is, can I pay his Rs.
12,000 in cash, in a single day, yes or no?
This is the question.
I will give him money, then what will happen?
I will show him the expenses of my office, because my
business has expenses.
I will show him the expenses and reduce my profit.
This will be my objective.
But what is the objective of the government?
To make a cashless economy.
What is the second objective of the government?
To allow minimum expenditure to this businessman.
If we mix both the things, then the government said, that
for a single person, in a single day, for any expense, if
you give maximum cash, then you can give maximum Rs.
For a single person, in a single day, if you give maximum
cash, up to Rs.
10,000, then whatever the expense will be, you will get the
deduction for that. Reduce that expense from your profit.
But suppose, if this Rs.
10,000 is not there, for example, if this becomes Rs.
50,000, then everything will be disallowed.
Look at this once.
Everything will be disallowed.
Maximum for a single person, in a single day, how much
cash? Rs.
Suppose, if Rs.
11,000 is paid in cash, then Rs.
11,000 will be disallowed. You will not get any benefit of
the expense there.
Rs. 10,000 for a single person in a single day.
Suppose, a person comes to me in the morning, and he gets a
bill of Rs.
This is person number A.
Another person comes, person number B.
He gets a bill of Rs. 7,000.
Now, what to do in this case? Is a single person getting a
payment of more than Rs.
10,000 in a single day? No.
So, in both the cases, the expense will be allowed.
But suppose, instead of Rs. 7,000, it would have been Rs.
17,000.
Is a single person getting a payment of more than Rs.
10,000 in a single day in cash?
Yes.
Now, this expense will be disallowed.
If you have shown this expense in your books and have
reduced your profit, then you will add this expense to your
profit again.
Because you will not get any deduction for this expense, my
dear.
So, what should we do?
If we spend in cash, then you are saying a maximum of Rs.
10,000 in cash in a single day.
Now, if I have to make a payment, how will I make a payment?
If you have to make a payment, then make a payment from the
cheque in your account.
Do it electronically. Do RTGS.
Don't deduct the bearer cheque.
Don't deduct the cross cheque.
Check it on the account itself.
Why check it on the account itself? You will get to know
whose account the money is going to.
That person will be able to put the money in his own
account.
He will book his income.
Come, let's do a reading on this.
Is the point clear so far? Rs. 10,000 in a single day.
For a single person.
Come here.
What is he saying?
Payment in excess of Rs. 10,000 made otherwise than through
prescribed modes.
Read this highlighted one.
Where the assessing expense in respect of which payment, or
total payment, made to one person in one day. Those who
catch this word, have to make a payment within a day.
If I am making a payment of 5 people in a day,
someone's 8, someone's 9, someone's 7, someone's 6,
someone's 5.
Allowed or disallowed? Allowed.
But if I am making a payment of one person in a day, his
payment will be Rs.
Disallowed.
If I am making a payment of two people in a day, one's
payment will be Rs.
11,000, and the other's payment will be Rs.
Rs. 9,000 is allowed.
Rs. 11,000 is disallowed.
According to 40A3, where assessing incurs in expense, in
respect of which payment, aggregate payment, made to a
person.
One person, in one day. Otherwise, then by account, we
check.
Or by account, we bank draft, or ECS.
Or through such other prescribed notes, if it exceeds Rs.
10,000, then such expense shall not be allowed as a
deduction.
It's a simple thing.
It's a simple point.
Look at the example.
If in respect of expense, this green one. Wait, let me
remove it.
Yes, look at it.
If in respect of expense, Rs.
32,000, incurred by X Limited, 4 cash payments of Rs.
8,000, one at 10am, one at 12am, one at 3pm, one at 6pm,
then the entire expense of Rs.
32,000 will be disallowed. 4 payments in cash, in one day,
to one person.
More than Rs.
10,000, in one day, to one person.
Is it going? It is going.
Then it will be disallowed, my dear.
This is a great provision.
If there is a transport operator, if there is a transport
operator, the government has disallowed it.
Instead of Rs. 10,000, it will be Rs. 35,000.
Because during the time of transportation, there is a great
need for cash. If you go on highways, or if you take a
truck to a place which is a little backward, where there is
no internet connectivity, if you are not able to pay it
online, then what will you do? Will you pay in cash?
So, the limit of the transport operator is Rs.
Instead of Rs.
10,000, it will be Rs.
it will be Rs. 35,000.
And in some cases, non-applicability has been mentioned.
There is no need to read so much.
I will tell you as it is.
There is no mention of applicability.
In some cases, more than Rs.
10,000, you can pay in cash to any one person.
Let me tell you in which cases.
Sir, if you have to pay more than Rs.
10,000, you can do it through a cheque. It will be allowed.
You can do it through electronic clearing system.
You can do online transfer.
You can make a draft and give it. If you pay more than Rs.
10,000 to LIC, Government or any bank in cash, then you
will be allowed to do so.
If you pay to a person who does not have a banking facility,
he lives in a place where there is no bank,
if I transfer the money online to his bank,
where there is no bank in his village, where will he get
the money from?
In that case, I paid him.
It was a work of Rs. 25,000, I paid him Rs. 25,000.
The case is genuine.
That person did some work, I paid him.
I paid him Rs. 25,000 in cash.
That person himself asked me to pay him in cash.
I said, why? I cannot pay more than Rs. 10,000.
Will you make me disallow the expense?
He said, sir, the problem is that there is no bank where I
live.
There is no bank around 10-20-50 km.
I will need cash only.
Where will I go to withdraw money?
They don't give so much money.
I said, okay, take it.
In that case, the government said, okay, it is a genuine
case.
We also understand.
In that case, we will allow you.
If a retirement benefit is being paid to an employee or his
family,
up to Rs. 50,000, you can do it in cash.
There is no problem.
You give salary to such a person, to such an employee,
who does not work in the office, but works at some other
place.
Temporarily, you get his posting done at such a place.
For example, your office is in Gurgaon.
You get his posting done in Chhattisgarh.
You stay in Chhattisgarh for 3 months.
How will he survive till then?
For that, you pay him cash.
Take cash, Rs. 1 lakh.
In that case, a genuine transaction is being made.
Everything is being done for a genuine business.
Employee is posted at any other place, other than the place
of business.
In that case, payment will be allowed.
In the case of a producer or a cultivator of agricultural
products,
if you pay them, payment will also be allowed.
The biggest case is that more than Rs.
a person does not have to pay in a day.
Do you do this in your business as well?
Do you pay more than Rs.
10,000 to check a person in a day?
Check and tell me.
If there is, then you will not get a deduction for that
expense.
You will put the expense in the books.
Because the person who is making books of accounts,
does not have the knowledge of tax yet.
He will put the expense.
But when the income tax people come,
they will add back that expense.
There will be no deduction for that.
You can check if there is any shop,
whatever your business is, big or small,
whatever you do,
go and tell them that more than Rs.
a person does not have to pay in a day.
Rs. 10,000 is fine.
A person does not have to pay more than Rs. 10,000 in a day.
It is a simple point.
Thank you very much.