Disallowances u/s 40A(3)

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Querist : Anonymous

Querist : Anonymous (Querist)

17 December 2010 Is salary for a month amounting Rs. 20040 paid to a person in cash also fall U/s 40A(3) and disallowed.......????

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

17 December 2010 yes. Sec,40(A)3 applicable for salary payment by cash more than Rs.20000 also

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CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

17 December 2010 Agree with Ramesh Ji.
Only exception:

Where the payment is made the assesssee by way of salr to his employee after deducting the income tax from salary in accordance with the provisions of Sec.192 of the Act, and then such employee :

(A) is temporarily posted for a continuous period of fifteen days or more in a place other than his normal place of duty or on a ship ; and

(B) does not maintain any account in any bank at such place or ship.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

17 December 2010 Good Reply by Mr. Sanjay

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Querist : Anonymous

Querist : Anonymous (Querist)

17 December 2010 Let payment is made to employee which works only for one month and after that he leaves
also he has not any bank account

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

17 December 2010 If posted at place other than his normal place of duty. Such expense will not be disallowed.

Querist : Anonymous

Querist : Anonymous (Querist)