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Sec 40A(2) and Sec 40A(3) of Income tax Act 1961

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C.A. Sanjay Bhatia

C.A. Sanjay Bhatia (Querist)
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14 February 2009 A COMPANY HAD PAID A SUM OF 25000 IN CASH FOR AN EXPENTURE TO A RELATIVE OF DIRECTOR OF COMPANY.THE AMT WAS UNFAIR TO THE EXTENT OF RS.6000 SO THAT FAIR VALUE IS RS.25000-6000=19000
HOW MUCH EXPENDITURE WILL BE DISALLOWED AS PER SEC 40A(2)i.e expenses on actual payment AND 40A(3)ie cash payments excedding Rs 20000

CA Hemant T Dewani

CA Hemant T Dewani (Expert)
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14 February 2009 we are paid rs.25000 as a expenses but exp are allowed rs.19000/- rs.6000/-is disallowed so your claim for exp are rs.19000/- this are below rs.200000/- only rs.6000/-is added in your income

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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14 February 2009 Continuing Mr.Dewani, section 40A(3) will not attract.

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