40A(3)

This query is : Resolved

Sidharth Jain 982156215 (Querist)
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27 April 2009 Sir, I want to know what would be implication if TDS is properly deducted on cash payment which was in excess of 20000 limit....
And if it is allowed than which circular or notification allows this.????
Thanks in advance....

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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27 April 2009 If you pay any expenditure above 20000 in cash irrespective of the fact that you have deducted tds or not the amount will disallowed. You can refer ammended section 40A(3).

Sidharth Jain 982156215

Sidharth Jain 982156215 (Querist)
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27 April 2009 thanks sir......
May I ask one more thing that in case of import purchase if any interest is paid to foreign party than r we liable to deduct TDS u\s 195.... considering "India Piston LTD" Case

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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27 April 2009 Yes. You have to deduct tds either follow section 195 of income tax act or refer to Double taxation avoidance agreement with that country and deduct the tds as per that. If you pay without deducting tds then the entire expenditure will be disallowed.

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