Cash payment above rs.20000/-

This query is : Resolved

seeta (Querist)
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22 September 2011 I have purchase shirt pic from a person not a dealer (who sale shirt pics on cycle)
I had made the following payment on
14/9/2011

10000(Cash)
20000(Cash)
19000(Cash)
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49000
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sir pls tell me that above payment is allowed or disallowed

Urgent

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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22 September 2011 Since the aggregate payment per day exceeded the threshold limit, expenses will be disallowed under section 40A(3) of the IT Act,1961 ,if purchases are for business purposes.

seeta

seeta (Querist)
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22 September 2011 Sir what is the threshold limit under section 40A(3)
If in this case I paid entry tax on it than also it disallowed

urgent

CA Sreenivasa Rao Munaga

CA Sreenivasa Rao Munaga (Expert)
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23 September 2011 Threshold Limit U/s 40A(3) is Rs.20000/- for one person on one day. If the payment is exceeding Rs.20000/-, you need to pay it through your bank.

It does not matter whether you paid entry tax or not.

Thanks,
CA M Sreenivasa Rao.

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