Doctoring salary records made difficult, firms nudged to pay through cheques
NEW DELHI: The government is pushing businesses and professionals — from doctors and lawyers to shop owners — to pay salaries of Rs 10,000 or more to their employees, including drivers, office boys and salesmen, by cheque or bank transfer if they want to claim tax credit.
The move is part of the Centre's drive to limit the use of cash in the economy and curb unaccounted funds for which it has resorted to proposing that the threshold for non-cash payments in a day be halved from the current level of Rs 20,000.
"Wages of people such as drivers or office boys are often Rs 10,000 or Rs 15,000, which used to be paid in cash. We will prefer it to go through non-cash channels. The person claiming it as expenses should make the payment by cheque or through digital means to claim tax deduction. This applies to firms and businesses and not to individuals," said a tax department official.
The move is part of the Centre's drive to limit the use of cash in the economy and curb unaccounted funds for which it has resorted to proposing that the threshold for non-cash payments in a day be halved from the current level of Rs 20,000.
"Wages of people such as drivers or office boys are often Rs 10,000 or Rs 15,000, which used to be paid in cash. We will prefer it to go through non-cash channels. The person claiming it as expenses should make the payment by cheque or through digital means to claim tax deduction. This applies to firms and businesses and not to individuals," said a tax department official.
A threshold of Rs 10,000 is expected to include most factory workers, salesmen, office boys, cleaners and drivers in large cities such as Delhi, Mumbai or Bengaluru. Company executives said the move would have a greater bearing on the unorganised and informal sector.
The government's push to make businesses and professionals to pay salaries of Rs 10,000 or more by cheque or bank transfer is expected to improve things in the unorganised sector. "It will be easier from a tracking point of view now because contractors or employers can't get away by getting workers to sign off on receipts of Rs 12,000 when they are actually paid Rs 8,000," said a company executive.
The government's push to make businesses and professionals to pay salaries of Rs 10,000 or more by cheque or bank transfer is expected to improve things in the unorganised sector. "It will be easier from a tracking point of view now because contractors or employers can't get away by getting workers to sign off on receipts of Rs 12,000 when they are actually paid Rs 8,000," said a company executive.
A tax consultant, however, said that some of the employers could still get away by devising ways to beat the system as the threshold was imposed on daily payments. "You can split the salary into fortnightly or even weekly payment if you want to use a loophole but the chances are that most employers will fall in line," the consultant with a leading firm said.
Apart from salaries the government has also sought to incorporate a clause to disallow depreciation if a machinery worth Rs 10,000 is bought in cash. Again, the idea is to choke the use of cash in the economy and this is expected to impact transactions involving a small enterprise.
Apart from salaries the government has also sought to incorporate a clause to disallow depreciation if a machinery worth Rs 10,000 is bought in cash. Again, the idea is to choke the use of cash in the economy and this is expected to impact transactions involving a small enterprise.
→
0 comments:
Post a Comment