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Vague question rs. 20000 ! !

Shivani (Learner) (1881 Points)

01 November 2013

Hi Friends

This may sound weird but I myself don't know what the proper question I have to ask here.

Let me try

I hear at times that something something happens if payment exceeds Rs. 20000.

What happens !!

Can anyone throw some light on this?

Shivani

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2 Replies

Nandan (Accountant) (40 Points)
Replied 01 November 2013

As per section 40a3 any payments in excess of 20k must be made in check or bank draft only. or else the same will be disallowed, an exception to this case is payment to transporter where the limit is 35k

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CA Chirag (Chirag Sheth & Associates) (1183 Points)
Replied 01 November 2013

if you have made cash payment or payment through bearer cheque for exceeding 20000, the entire amount is disallowed as expenses. So request you to make payment through cheque other then bearer.(As per Income Tax)

hope this will clarify.

ca chirag

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