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Allowability of expenditure made in cash in excess ofRs20000

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This query is : Resolved

kamini (Querist)

13 December 2010 Plz clarify that as per sec 40A(3) any expenditure made in cash in excess of Rs20000/- shall not be allowed if paid to any one right! but a Pvt hospital which is exempt u/s 17(ii)& 194(J) is also covered in the section i.e if payment is made in cash in excess of Rs 20000 then still it shall be disallowed basically an accident occured on site for which company occured more than 1 lakh in cash but more than 20000 in a single day on operation n etc charges so whether is there any provision that that the expenditure get allowed irrespective of this cash payment,plz tell asap

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

13 December 2010 For reading sec.40A(3) along with rule 6DD. not specifes any specfic exemption for this kind of expenses. so even payment to hospital by cash also will attract sec.40A(3) except considering rule 6DD conditions

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