Restrictions on issuing bearer cheque, Other Topics

[PRADEEP KUMAR]

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?

Posts / Replies

[Mukesh Kumar]

It seems there is no restriction in issuing bearer cheque as per the general law of negotiable instrument act. Moreover, the provisions of companies act also have no provision in this regard. But, as per the provisions of Income Tax Act, you have to be careful that in certain cases to claim benefit of expenses you have to make payment through account payee cheque only. Mover over any acceptance or re payment of loan in excess of rs. 20,000 shall also be made by way of account payee cheque.