Disallowances

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 July 2010 In which of the following situation expenses are disallowed under section 40A(3) as per Income Tax Act ,r.w Rule 6DD.

Situation 1:-
a) Day 1 IOU to Employee 50000
To Cash 50000

b) Day 10 Hotel expenses 50000
To IOU to employee 50000
(Being employee paid cash to hotel)

Situation 2:-
a) Day 1 IOU to Employee 50000
To Bank 50000

b) Day 10 Hotel expenses 50000
To IOU to employee 50000
(Being employee paid cash to hotel)

Situation 3:-
a) Day 1 IOU to Employee 50000
To Cash 50000

b) Day 10 Hotel expenses 50000
To IOU to employee 50000
(Being employee paid through credit card to hotel)

Situation 4:-
a) Day 1 IOU to Employee 10000
To Cash 10000

b) Day 2 IOU to Employee 20000
To Cash 20000

c) Day 3 IOU to Employee 20000
To Cash 20000

d) Day 10 Hotel expenses 50000
To IOU to employee 50000
(Being employee paid cash to hotel)

Situation 5:-
a) Day 1 IOU to Employee 10000
To Cash 10000

b) Day 2 IOU to Employee 20000
To Cash 20000

c) Day 3 IOU to Employee 20000
To Cash 20000

d) Day 10 Hotel expenses 50000
To IOU to employee 50000
(Being employee paid through credit card to hotel)

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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03 August 2010 Situation 1:-

If the single payment voucher exceeds Rs.20000 the expense will be disallowed

Situation 2:-

No disallowance

Situation 3:-

Single voucher provided by employee More Than Rs.20000 disallowed

Situation 4:-

Single voucher provided by employee More Than Rs.20000 disallowed

Situation 5:-

No disallowance

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