Cash payment

This query is : Resolved

SANIA (Querist)
Follow

31 January 2015 hlo friends, can a partnership pay to its partner's imprest a/c payment in excess of rs. 20000.whether sec 40(A)(3) applies here.

Nikhilesh Kataria

Nikhilesh Kataria (Expert)
Follow

31 January 2015 In section 40A(3) read with rule 6DD, no exception is provided to firm for payment made to its partners and as such the interest payment to any partner in cash in excess of Rs.20000/- shall be disallowed

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

31 January 2015 The payments made to the IMPREST account do not attract the provisions of
section 40 A(3) of the Act. However,if any expenditure is booked in cash over and above Rs. 20,000/-,then the provisions of section 40A(3) of the Act are to be applied and disallowance are to be worked out thereunder.