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sec 40A(3)

08 August 2010

I want ur valuable suggestions for the following queries.....regarding disallowance of cash paymnt exceeding Rs.20000 u/s 40A(3)...

1-what if there z payment of unsecured loan exceeding Rs.20000 in cash ,will interest provided on such loan be disallowed............???????

2-And what about LIC premium paid above Rs.20000 in cash...........& investment in PPF above Rs.20000 in cash...........will deduction u/s 80C not be allowed.............??????

Thanx in advance............

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6 Replies

Ayyswariya RG (Knowledge Seeker) (3711 Points)
Replied 08 August 2010

Hi, According to section 40a(3), it deals with cases where the cash payment can exceed RS.20,000 by way of cash [RULE 6DD],

Payment made to banks, payment made to LIC comes under Rule 6DD.

hope u r clear now

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madhur gupta (student/article ) (1022 Points)
Replied 08 August 2010

Expenses come under from sec28 to 43 are disallowed

sumit bhatia (ca-final article) (368 Points)
Replied 08 August 2010

agree with rg

Parth - CA,CS,CMA (Learner) (406 Points)
Replied 08 August 2010

Only deductions u/s 28-43 are disallowed u/s 40A(3).. LIC premium is allowed for two reasons.. One it is specifically excluded by 6DD and other is it is covered by 80C.

Ur answer to first question is, repayment/acceptance of loan is covered by 269 SS and 269 T. As per legal principles, specific provision prevails the general.. 40A (3) is general.. So disallowance can be made only under 269.. Under which is full amount paid in cash is disallowed.. (Even if someone has paid Rs. 21,000 towards interest and no sum towards principal, the section which will be attracted is 269 T and not 40A(3))

(Guest)

Originally posted by : Parth
	Only deductions u/s 28-43 are disallowed u/s 40A(3).. LIC premium is allowed for two reasons.. One it is specifically excluded by 6DD and other is it is covered by 80C. Ur answer to first question is, repayment/acceptance of loan is covered by 269 SS and 269 T. As per legal principles, specific provision prevails the general.. 40A (3) is general.. So disallowance can be made only under 269.. Under which is full amount paid in cash is disallowed.. (Even if someone has paid Rs. 21,000 towards interest and no sum towards principal, the section which will be attracted is 269 T and not 40A(3))