deduction u/s 40A

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 March 2011 case 1;
if i purchase suppose on 25/02/11 value rs 40000 and payment in cash made as below
1. on 26/02/11-rs 10000
2. on 28/02/11- rs 10000
3 on 01/03/11-rs 10000
4. 0n 02/03/11- rs 10000
then is there any disallowance u/s 40A

case 2
if i purchase suppose on 25/02/11 value rs 60000 and payment in cash made as below
1. on 26/02/11-rs 10000
2. on 28/02/11- rs 10000
3. on 01/03/11 -rs10000
4. on 03/03/11- rs 30000
then how much expense is disallowed

CS ,CMA Shambhu Kr. jha

CS ,CMA Shambhu Kr. jha (Expert)

01 March 2011 Dear Rizwan
Dis allowance u/s 40A is depend upon a number of factor must important is place of payment .
There is certain exemption limit for certain cases .
And furthermore cash payment is allowed up to Rs 20000/- Per daily basis in normal cases

Thanks

CA Jeen paul

CA Jeen paul (Expert)

01 March 2011 there are 3 conditions to be fullfilled to effect the provisions of Sec 40A
1. it should be an expenditure deductiable u/s 30-37
2. the amount of expenditure should be above Rs.20000/-
3. payment shold be made in cash or otherwise than by way cash and also inexcess of Rs.20000/- per day.

in your case1 ther is no violation
case 2 ther is a violation as you have paid 30000/

the disallowance is 100% of the payment ie.,Rs 30000/-

in an another example: if you have purchsed 2 items for RS 15000/- each and paid Rs 30000/- in a day there is no violation as it provides for a "expenditure"

hope the above will be ok

Message likes : 2 times

Querist : Anonymous

Querist : Anonymous (Querist)

01 March 2011 thanks alot to both

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