Sec 40(A)(3)

This query is : Resolved 

10 November 2009

ABC company is a logistics company, it pays excess of Rs.35000 to one of its transporters. When the same was enquired it was explained that the amount is not pertaining to one truck it pertains to 4 trucks. Wether it is allowed or disallowed?

Ram Avtar Singh (Expert)
10 November 2009

ther are four truck and four GR. then Four voucher required by mentioned Truk no.

B.Chackrapani Warrier (Expert)
10 November 2009

In case of payments to transporters, normally, each GR can be said to be a separate contract,if the goods are transported at one time, even though payments for several GR's are made under one bill.If your case fits into the above condition , no TDS is required. But, if the goods are transported continuously in pursuance of a contract for a specific period or quantity the above condition will not apply. So pl check the transactions in the light of the above.

Ref :- Circular 715 reported in 215 ITR (st) 14 question no 9.

10 November 2009

If single payment or aggregate of payments exceeds Rs. 20000 in a day then it would be disallowed even the payments related to different vouchers/bill/invoice.

NOTIFICATION NO. 97/2008, DATED 10-10-2008

Kamal (Querist)
10 November 2009

thanks a lot for ur replty.

Ram Avtar Singh (Expert)
10 November 2009

Amendment to Section 40 A(3)

It is proposed the limit for disallowance of expenditure made in the case of transporters otherwise than by an account payee cheque or account payee bank draft from RS.20,000/- to Rs.35,000/-

The proposed amendment will apply to transactions effected on or after the 1st October,2009.

It is proposed that any institution (having receipts of more than rupees one crore) has to make an application for seeking exemption by filing application or on before 30th September of the succeeding financial year.

An amendment is made to include certain activities within the ambit of provisions relating to charitable purpose in the Income-tax Act.

Guest (Expert) 10 November 2009

As Payment to one transporter exceeds Rs. 35000 its disallowed.

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