I need to know whether section 40A(3) disallowance is applicable for cash purchases in excess of Rs.20000. In 40A(3) payment made in relation to expenditure is disallowed. Please clarify me whether payments made sundry creditors in excess of Rs.20000 in a day is disalllowed or not.
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Cash payment in excess of rs.20000
Replies (1)
1. YES, 100% disallowance is applicable,
2. Exceptions; Payments made to banking and other credit institutions, payments to government in certain cases, payments by book adjustments and payments for agriculture or animal husbandry produce with certain conditions etc.,
Please feel free to contact, in case of further queries;
cabrijesh @ yahoo.co.in
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