Section 40A(2)(b): Tax Implications of Related Party Payments

Chaitra Seetharam , Last updated: 03 July 2025 Share Follow on Google News

Section 40A(2)(b) of the Income Tax Act means that if a taxpayer makes a payment to a related party, they cannot claim it as a business expense if they cannot prove that the payment was at market value and necessary for business purposes. Section 40A of Income Tax Act talks about “Expenses or pa

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About the Author

Chaitra Seetharam

Finance Professional

I write on Income Tax, TDS, ITR filing, banking rules, investment schemes, and financial law updates in India. My articles simplify complex tax provisions, compliance requirements, and policy changes to help taxpayers, professionals, senior citizens, and businesses stay informed and financially aware.

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Section 40A(2)(b): Tax Implications of Related Party Payments

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