Easy Office

Applicability of 40A(3)

This query is : Resolved 

26 March 2008 URGENT! please clarify! my client has made cash payment for purchase of capital asset exceeding Rs. 20,000/-.Whether the expenditure will be disallowed! or Whether depreciation in that respect will be disallowed!

26 March 2008 allowed as section 40A(3) does not cover capital expenditure

26 March 2008 SECTION 40A(3) DISALLOWS ONLY REVENUE EXPENDITURE EXCEEDING RS 20000/- AND NOT CAPITAL EXPENDITURE EXCEEDING RS 20000/-,THEREFORE CAPITAL EXCEEDING RS 20000/- CAN BE PURCHASED IN CASH AND NO DEPRICAITION SHALL BE DISALLOWED




26 March 2008 Section 40A(3) speaks in respect of expenditure only.since you have purchased a capital asset which is not an expenditure so there is no question of disallowance u/s 40A(3)regarding amount of capital assets purchased as well as depreciation thereon.

26 March 2008 Section 40A(3) does not cover capital expenditure. So, even if u pay amount exceeding Rs 20000/- in cash, not to worry.



You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

CAclubindia's WhatsApp Groups Link


Similar Resolved Queries


loading


Unanswered Queries