31 March 2015
if you are not covered by rule 6DD listed as follows then will be disallowed;
Exception-Rule 6DD
No disallowance shall be made under sec 40a(3) in the following situations: When payment is made on the day when there is bank holiday or strike. When payment is made to a person who resides or does business in a village where there is no bank facility.
When payment is made to government and it is required to pay in cash. Like deposits, tax to government.
When payment is made to Reserve Bank of India, state bank of India,
Co-operative bank or land mortgage bank, any primary agriculture credit society
LIC
5. Where the payment is for the purchase of manufactured products and power was not used in production.
6. Where payment is made by way of book adjustment
7. Where payment is for following purchases Agriculture or forest products Animal husbandry or poultry farming products Fish products or fish Agiculture or horticulture products
8. Where the payment is made by Letter of credit arrangement via bank Mail or telegraphic transfer Book adjustment in bank Bill of exchange payable to a bank Credit card or debit card Electronic transfer
9. When payment is for gratuity or retrenchment compensation to employee or his legal heirs and salary of the employee does not exceed Rs 50000
10. When the payment is for employee’s salary after deducting TDS and when such employee
Is transferred to place other than his normal place of duty or on ship for fifteen days or more.
And he does not maintain bank account at that place or ship
11. Where the payment is to agent by principal where agent has to pay in cash for goods and services on behalf of principal.
12. Where payment is made by money changer for purchasing of foreign currency or traveler’s cheque.
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