Cash payment more than rs.20,000

read Section 40 A(3) care fully, which says that EXPENDITURE incurred which is more than Rs.20000/- the payment in  respect of the same is not allowed in cash or bearer cheque but allowed through cheque, demand draft or any other electronik mode such as internet banking. read with exception of the section RULE 6DD.

The one very most important thing is that if there two  expenditure incurrd and both  are less than or Rs. 20000/- from the same person than you can make cash payment to the person more than Rs.20000/- in cash in same day and expenditure is allowed.

SECTION CONCETRATE ON EXPENDITURE AMOUNT

yes absoulutly correct

yes it is correct that cash payment more than of Rs.20,000 not allowed to one person one day for expenses

is this limit just for expenses or also applicable for payment to creditors?

Any expenditure in respect of which payment or aggregate of payments made to a person in a day exceeds Rs.20,000/- in cash  or bearer cheque ( exceed Rs. 35000/- for plying , hiring or leasing goods carriage ) is disallowed u/s 40A(3) but there are some exception under some crcumstances which specified in Rule 6DD.

please write more example of payment exceeding rs 20000....from kiran g panchal

U/s 40 A(3)  Cash paid not exceed of amounting Rs.20000/-in a day to a one party .If made in books of a/c penalty U/s 271(1)C   (3 times penalty in Net Profit )

it is allowed for purchase of old machinery

If an cash payment is made to bank for franking , is it allowable expense???

If an cash payment is made to bank for franking , is it allowable expense??? the cash payment is made of RS 31500.

Cash payment to Bank   for franking  . This expeness is not allowable  because  as per sec.40 A(3) cash paid not exceed amount of Rs.20000 /- it is allowable for Demand  Draft  ..