Cash payments
This query is : Resolved
amit kumar
(Querist)
04 March 2014
Dear sir,
Can we do PURCHASES in cash in excess of Rs.20,000?
will it b disallowed in 44AB but it is not expense?
04 March 2014
Purchases is an expense. It is allowed as deduction while computing income under the head business or profession.
Accordingly if purchases are made in cash exceeding Rs. 20,000 then it will be disallowed u/s 40A(3).
Accordingly if purchases are made in cash exceeding Rs. 20,000 then it will be disallowed u/s 40A(3).
Nikhil Kaushik
(Expert)
04 March 2014
agreed with Siddhartha. Only where such purchase is a purchase of capital asset, disallowance is not attracted. otherwise disallowance is almost guaranteed subject to exceptions created under Rule 6DD
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