Cash Payment in Excess of Rs. 20000/-

This query is : Resolved

Kewal (Querist)
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25 October 2008 Good Evening Sir,

As per Section 40(A)3 of Income Tax Act, if Payment is made through CROSSED Cheque(not A/c Payee Cheque) is it treated as allowable expenditure if the payment exceeds Rs. 20000/-

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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25 October 2008 As per section 40(A)(3)(a) expenses will be disallowed.

sagar

sagar (Expert)
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25 October 2008 Kewal,
If The payment is through Crossed Cheque/ A/C Payee Cheque/DD. The Expenses is Allowed.

Hence in your case there is no problem.
Cheque crossed has become A/C Payee Automatic

CA. Sachin Kumar

CA. Sachin Kumar (Expert)
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25 October 2008 section 40(A)(3) has been amended. Now if a payment exceeding 20000/- is allowed under income tax act if it is made through a account paypee cheque only.

Harish Aggarwal

Harish Aggarwal (Expert)
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25 October 2008 I am agree with Mr. Sachin Kumar, it is amended last year, cross cheque can be endorsed to anybody but cross cheque with language "account payee only" cant be endorsed

SANJAY VERMA

SANJAY VERMA (Expert)
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25 October 2008 How can one verify whether its crossed or a/c payee at the time of assessment?

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
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26 October 2008 AO may always call for evidence from bank

CA Bosu babu

CA Bosu babu (Expert)
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28 October 2008 I agree with sagar

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Cash Payment in Excess of Rs. 20000/-

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