SQL query for monthly bills with amounts paid
Do you really need the subquery?

SELECT
bill.id as bill_id,
master.id as party_id,
master.name as party_name,
`amountExcVat`,
bill.vat,
amountExcVat + bill.vat as 'amtIncVat',
`purchasedDate`,
bill.status,
SUM(payment.cashPaid) + SUM(payment.chequePaid) as 'Amount Paid(cash+chq)',
FROM `partybill` as bill, `partymaster` as master, partypayment as payment
WHERE
party_id = partyId AND
bill_id = partyBillId AND
bill.partyId = master.id AND
bill.partyId = payment.id AND
UPPER(MONTHNAME(`purchasedDate`)) = 'OCTOBER' AND
YEAR(`purchasedDate`) = '2013'
GROUP BY partyId, partyBillId)


(I just wrote this without testing it so it might not work right out of the box)

Since you are already querying partypayment you should be able to do this