From advance payment of salaries to bonuses, demonetisation has brought a sudden windfall to employees of private firms who are suddenly inundated with a lot of cash from their employers. In an effort to dispose of the discontinued Rs 500 and Rs 1,000 denomination notes, some private firms and even business owners are reported to have been paying monthly salaries to their employees in cash.
“My employer gave all of us two months’ salary in advance. Our boss clearly told us that if he didn’t do this, he would face losses and might not be in the position to pay us after two months. So we had to accept the payment,” said an employee of a private firm in Kalyani Nagar.
A sales counter manager at a garments store said her employer not only gave her one-month salary in advance but also asked her if she could deposit some cash in her bank account. “I have been working at this store for many years and he trusts me. He gave all the four employees their salary in advance and asked me if I could deposit some money for him,” she said.
A former employee of a Hadapsar-based firm said that even his past dues have been cleared. “I had left the job about three months ago and my dues were still pending. The employer was delaying it, but last week, he called and paid me in cash with Rs 500 denomination notes,” he said. Some employees have also been given their current month’s salary in cash.
However, chartered accountants warn against such a move.
“What is the reason for distributing money in advance? Especially if it is in cash. You will be distributing advance salaries in cash to employees but the notes your are distributing are not tenderable. If something is not legally tendered, how it be distributed among the employees? This is nothing but a way to get rid of the black money. If someone is caught doing it, besides other legal actions, they will have to pay the regular tax as well as 200 per cent penalty on the amount,” said Rishabh Parakh, CA and founder of Moneyplant Consultancy.