Restriction of issue of Bearer Cheque

[Pandurang Nirmal]

Pl.tell us whether an incorporated company can freequently issue bearer cheques to its clients and employees and workers?What are restrictions on issuing bearer cheques as per company law and other laws inforce in our country?

AI Summary

Incorporated companies face restrictions under Section 40A of the Income Tax Act on issuing bearer cheques over 20,000 daily. A query was raised regarding whether an incorporated company can frequently issue bearer cheques to its clients, employees, and workers, and what legal restrictions apply. In response, it was noted that according to Section 40A of the Income Tax Act, 1961, if payments exceeding twenty thousand rupees (or twenty-five thousand in certain cases) are made to a person in a day via methods other than an account payee cheque or bank draft, the expenditure is not deductible. This response was confirmed as correct by another participant in the discussion.