Sec. 40(a)(3) payment disalllowed or allowed
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 June 2012
Dear All,
My client Paid a freight payment to xyz transporter amount Rs. 45000/- in single day against separate bill 1, 2 & 3 each Rs. 15000/-.
I want to know if my client paid 45000/- in single day against separate bill 1,2,3 then it will be allowed expenditure or disallowed.
My client Paid a freight payment to xyz transporter amount Rs. 45000/- in single day against separate bill 1, 2 & 3 each Rs. 15000/-.
I want to know if my client paid 45000/- in single day against separate bill 1,2,3 then it will be allowed expenditure or disallowed.
08 June 2012
The expenditure will be allowed because Section 40A(3) also applies to aggregate of payments made in a day.
08 June 2012
EXAMPLE :To illustrate with an example, let us assume a taxpayer has incurred an expenditure of Rs 40,000/-. The taxpayer makes separate payments of Rs 15,000/-, Rs 16,000/- and Rs 9,000/- all by cash, to the person concerned in a single day. The aggregate amount of payment made to a person in a day, in this case, is Rs 40,000/-. Since, the aggregate payment by cash exceeds Rs 20,000/-,Rs. 40,000/- will not be allowed as a deduction in computing the total income of the taxpayer in accordance with the proposed amendment.
08 June 2012
EXAMPLE :To illustrate with an example, let us assume a taxpayer has incurred an expenditure of Rs 40,000/-. The taxpayer makes separate payments of Rs 15,000/-, Rs 16,000/- and Rs 9,000/- all by cash, to the person concerned in a single day. The aggregate amount of payment made to a person in a day, in this case, is Rs 40,000/-. Since, the aggregate payment by cash exceeds Rs 20,000/-,Rs. 40,000/- will not be allowed as a deduction in computing the total income of the taxpayer in accordance with the proposed amendment.
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