Company has paid some of the salary in cash - was recently told its not allowed by government officer during an inspection

Hi, My company has paid some of the salary in cash. I was recently told by a government officer during an inspection that salary cannot be paid in cash. Can any one pls explain if it is correct or not. Also pls name related law to it like income tax act, payment of wages act, EPF act etc.. Thanx in advance.. :)

Hi,
Not sure what is the size of your Company. If you work for a registered Private limited company or proprietorship company if the number of employees exceeds all statutory commitments has to be followed by your employer. When salary is paid it may be un accounted money. By paying salary by cash you loose your statutory benefits like PF , ESI (if applicable) etc and in other way it is evasion of income tax rules.