Proving your work-ex in the IIMs you will require following documents:
- Joining letter (not the Appointment Letter)
- Work-experience certificate issued by your company
- First month and last three months payslips (cash salary candidates also should provide salary slips)
In India, receiving a salary in cash is a common practice, especially in smaller businesses or informal sectors. While it is perfectly legal, it comes with certain responsibilities and considerations to ensure compliance with the law and financial security. Here are three key aspects to consider when being paid in cash:
Legality
Receiving your salary in cash is legally permissible in India. However, you must comply with applicable tax laws. If your annual income exceeds the basic exemption limit of ₹2.5 lakh, you are required to declare this income and pay taxes as per the Income Tax Act. Employers, even when paying in cash, are obliged to deduct TDS (Tax Deducted at Source) if your income falls within the taxable bracket. Failing to report such income can lead to penalties and scrutiny from tax authorities, making it essential to ensure your cash salary is accounted for and tax-compliant.
Documentation
One of the challenges of receiving a salary in cash is the lack of automatic transaction records that a bank payment provides. To address this, it is crucial to maintain proper documentation. Request a salary slip, signed receipt, or any written confirmation from your employer as proof of payment. These records are not only necessary for filing your income tax return (ITR) but also for other purposes such as applying for loans, credit cards, or visas. Proper documentation safeguards you from potential financial or legal issues arising from undocumented income.
Tax Compliance
Declaring your income in your ITR is non-negotiable, regardless of whether your salary is received in cash or credited to your bank account. Failing to report cash income can lead to legal complications and hefty fines. By accurately declaring your cash salary, you maintain compliance with the law and establish a verifiable financial history. This transparency is vital for building financial credibility and avoiding unnecessary stress during tax assessments or audits.
In conclusion, while receiving a salary in cash is acceptable and often practical for small businesses, it requires a proactive approach to ensure proper documentation and tax compliance. By adhering to these practices, you can enjoy the flexibility of cash payments without facing any legal or financial hurdles.
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