Sec 40a(3)

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Querist : Anonymous

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Querist : Anonymous (Querist)
04 April 2014 Whether cash paid as loan to an employee in excess of Rs. 20,000/- will attract disallowance u/s. 40a(3) of income tax act?

04 April 2014 Section 40a(3) is related with expenditure with respect to which payment is made in cash.

hence Above section is not applicable on Loan to an employee.

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Querist : Anonymous

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Querist : Anonymous (Querist)
04 April 2014 What if loan being repaid from the salary? Salary is expenditure for company.

Thanks in advance.

04 April 2014 If it is paid to employee as loan it becomes perquisites and calculate perquisite value and deduct tds accordingly from his salary.

In this case also section 40a(3) dis- allowance is not applicable.

as you are paid for loan only.


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