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Payment above rs 20,000

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 March 2014 A Pvt. Ltd. Company paid rs 50,000 cash to travel agent.
25,000 for rent exp. Dr.
20,000 for traveling exp and Dr.
5,000 other exp. Dr.

50,000 cash. Cr.
Those are JV in a books

Is it allowable???

Akash Barman

Akash Barman (Expert)
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14 March 2014 An amendment was made through Finance act 2008 and after 01.04.2008, where a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, the disallowance of such expenditure shall be made under the proposed sub-section (3) of section 40A or the payment shall be deemed to be the profits and gains of business or profession under the proposed sub-section (3A) of section 40A,as the case may be.

As in your case the payment has exceeded Rs 20000 to a single party , and if the same has been paid on a single day,this would be disallowable expense

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