Cash payt excluction 40a(3)

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Shruthi (Querist)
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10 October 2013 40A(3) applicable or not in the follg sitn:

1)Rigan purchases goods in cash from his brother for Rs 40000, whose market value is Rs 35000.

2)Riyan purchases a building for RS 1000000 and makes the payment in cash.

3)Riyan makes a purchases of goods of RS 60000 and makes payment of RS 45000 by account payee cheque and RS 15000 in cash.

Please reply and thanks in advn.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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10 October 2013 Ans 1. Yes
Ans 2. It is not an exp.
Ans 3. No

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Ganeshbabu K

Ganeshbabu K (Expert)
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10 October 2013 1)Sec.40(A)(3)Applicable and disallowed and also need to report in tax audit report under section 40A(2)(b)
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2)Sec.40A(3)Not applicable for Expenditure not debited to profit and loss

3)Sec.40A(3) not applicable

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CA Pallav Singhania

CA Pallav Singhania (Expert)
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10 October 2013 Agree with Experts,

1. Purchased made by Regain will be disallowed as Cash Payment exceed the prescribed limit of Rs. 20000. Sec. 40{a}3 applicable..

2. Purchase of Asset can be made in cash, no disallowance..
Sec. 40{a}3 not attracted...

3. Cash payment limit is under 20000, no disallowance, section 40{a}3 not attracted..

regards,

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