Sec. 40A(3)
This query is : Resolved
08 February 2009
we all know that the given section was amended in the finance act 2008. Earlier a single payment in cash to a party cannot exceed Rs. 20000 in a day otherwise the same will be dissallowed to the extent of 20%. the act got this sec. amended as - the aggregate of payments made to a single party in a day against any exp. in excess of Rs. 20000 will be dissallowd. Now the problem is- a client of ours argue that this provision is just for a single bill . it means that if he recieves 2 bills from a party both of Rs. 20000 n he makes the payment of both on the same day in cash then it will be allowed n hence the provisions of the section will not be attracted. How could this be if the amendment is so clear.......???? plzz help n confirm that the client is wrong or either i am wrong....
08 February 2009
Section 40A(3) attracts and thus the clients view is wrong.
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