Overriding concept between two sections 115BAA and 40A(3)

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Companies opting for Section 115BAA of the Income Tax Act must still adhere to other provisions, including Section 40A(3) regarding cash payments. There is no exemption that allows Section 115BAA to override the disallowance rules of Section 40A(3). Therefore, cash payments exceeding the prescribed limit under Section 40A(3) will result in the expense being disallowed, even for companies following Section 115BAA.

Marimuthu

Marimuthu (Querist)

11 June 2025 Dear Experts,

A company is following the section 115BAA of the Income Tax Act.

Unfortunately, the company has remitted the amount Rs 70,000.00 in cash to the transporters.

Whether will it be accepted one? Or not

Is there any overriding concept between two sections 115BAA and 40A(3)

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

12 June 2025 Companies opting for Section 115BAA must comply with all other provisions of the Act unless specifically exempted. There is no exemption under 115BAA from the restrictions of Section 40A(3).

A company following Section 115BAA that makes a cash payment over the limit set by Section 40A(3) will still have that expense disallowed, just like any other company.

There is no statutory provision or judicial precedent that allows Section 115BAA to override the requirements or disallowances under Section 40A(3).

Message likes : 1 times

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

27 September 2025 Good luck..

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