08 July 2011
Section 40A(3) of Income Tax Act speaks about expenses claimed and paid in cash exceeding certain limit. If you have made the investment in Fixed assets the act is not putting any restriction. You can purchase the assets in cash but restrict as far as possible and debit to the respective assets but the cash payment should always be supported with the proper documents and if required take the cash memo and in case of second hand machinery or other assets have an agreement in which you can specifically mentioned terms cash payment.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
11 July 2011
Hi,thanks for the replies. But I wanted to ask that how fixed assets will come in the Balance sheet since it has to be expensed out in the Profit & loss A/c in the year of purchase under cash basis of accounting.
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