Disallowance of expenses in excess of 20000 in cash in a day
This query is : Resolved
17 May 2017
If an assessee make payment to bank in cash in excess of 20000 to make a DD in favour of creditors for an expense
Is there any consequences as per Section 40 A(3) i.e this expense is allowed or not ???
Is there any consequences as per Section 40 A(3) i.e this expense is allowed or not ???
17 May 2017
Giving bank 20000 for DD of same is not an expense. Its conversion of one form of money to another. The payment to creditor of 20000 will be allowed in income tax. This limit has been reduced to 10000 by finance act 2017
17 May 2017
Dear Sir
If it is just conversion of money than why in Income tax act, the word Account payee demand draft is mention???
Why they not use the word Demand draft only??
If it is just conversion of money than why in Income tax act, the word Account payee demand draft is mention???
Why they not use the word Demand draft only??
17 May 2017
Are there any demand drafts issued by bank which can be bearer instruments??
18 May 2017
It is possible,
If DD is not account payee or crossed than it means it is bearer
But as per RBI NotificationDD in excess of 20000 must be crossed
If DD is not account payee or crossed than it means it is bearer
But as per RBI NotificationDD in excess of 20000 must be crossed
18 May 2017
Personally i have never seen bearer drafts as account payee is already printed on drafts and while applying fir DD you have to tell the name of the payee.
18 May 2017
Anyway the purpose of the clause is to discourage large payments in cash therefore if you pay through bank your expense will be allowable.
Bearer instruments are rare practically.
18 May 2017
Thanks sir
For giving your valuable time and for your suggestion
For giving your valuable time and for your suggestion
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- About TDS & Income Tax
- Claiming exemption of perquisite for employee-owned car under New Tax Regime in ITR-2
- Scrutiny and reopening of past returns
- Section 194JA & JB Income which ITR Form to use
- PPF interest-As Exempt Income disclosure
- Pass word to open justification report for Q1 for FY 2026-27
- Under construction property in ITR
- Not able to file ITR
- Building tax payment deduction in rental Income
- Upload Level ValidationITR3Category of Defect B/D
- Regarding ITR filing with more value than showing in AIS/TIS
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Delisted shares sold in off market/ Rebate u/s87A
- In Exports Sales HSN details where to fill
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- Difference in tax comparison report
- Gst invoice numbering and delivery challan numbering
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
