sec 40a(3) cash payments
This query is : Resolved
04 August 2008
dear sir,
please let me know for a.y 2008-09 there are cash payments in installments towards creditors totalling upto 95000. what is the position .
1)is it totally considered as income
2)does each payment need to exceedrs.20,000 or the total payments to a particular paymts.
please let me know for a.y 2008-09 there are cash payments in installments towards creditors totalling upto 95000. what is the position .
1)is it totally considered as income
2)does each payment need to exceedrs.20,000 or the total payments to a particular paymts.
05 August 2008
For AY 2008-09:
Cash payments exceeding Rs 95000 in a year with no single payment exceeding Rs 20000/- are fully allowable.
Limit of Rs. 20000 is to be analysed for each and individual payment
From Assessment Year 2009-10:
Aggregate Cash payments in a day should not exceed Rs 20000 whether by way of single or multiple payments -Section 40A(3)
Expenses provided in a year and payment made in the proceeding years has also been covered under the scope of this section.
Cash payments exceeding Rs 95000 in a year with no single payment exceeding Rs 20000/- are fully allowable.
Limit of Rs. 20000 is to be analysed for each and individual payment
From Assessment Year 2009-10:
Aggregate Cash payments in a day should not exceed Rs 20000 whether by way of single or multiple payments -Section 40A(3)
Expenses provided in a year and payment made in the proceeding years has also been covered under the scope of this section.
05 August 2008
Further to the query raised and posted in the comments my reply is as under:
The bill may be paid in 5 daily instalments of Rs 19000/ each
The cash payments to creditors in FY 08-09 agst dues pertaining to FY 07-08 need not be covered by sub section 3A of section 43.
From AY 2009-10, expenses with aggregate cash payment on a day in excess of Rs 20000 are disallowable.
The bill may be paid in 5 daily instalments of Rs 19000/ each
The cash payments to creditors in FY 08-09 agst dues pertaining to FY 07-08 need not be covered by sub section 3A of section 43.
From AY 2009-10, expenses with aggregate cash payment on a day in excess of Rs 20000 are disallowable.
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