Section 40a(3)
This query is : Resolved
21 May 2019
Electricity bill paid through a middleman via RTGS.
Whether that expense will be allowed or not bcoz as per section 40(A)(3)
"where assessee incurs any expenditure, in respect of which payment or aggregate of payments made to a person in a single day otherwise by ACCOUNT PAYEE cheque drawn on a bank or by an ACCOUNT PAYEE bank draft or use of electronic system through bank account exceeds 10000, such expenditure shall not be allowed as deduction."
and my query is that whether amount paid via RTGS should be made in favour of electricity department (Becoz as per law interpretation payment should be account payee whether in form of cheque/bank draft/electronic mode.
Through middleman it will be not account payee bcoz rtgs will be in favour of middleman.
Please resolve the issue, we welcome your valuable suggestions
Thanks & Regards
Whether that expense will be allowed or not bcoz as per section 40(A)(3)
"where assessee incurs any expenditure, in respect of which payment or aggregate of payments made to a person in a single day otherwise by ACCOUNT PAYEE cheque drawn on a bank or by an ACCOUNT PAYEE bank draft or use of electronic system through bank account exceeds 10000, such expenditure shall not be allowed as deduction."
and my query is that whether amount paid via RTGS should be made in favour of electricity department (Becoz as per law interpretation payment should be account payee whether in form of cheque/bank draft/electronic mode.
Through middleman it will be not account payee bcoz rtgs will be in favour of middleman.
Please resolve the issue, we welcome your valuable suggestions
Thanks & Regards
22 May 2019
Amount paid via RTGS will be considered as use of electronic system through bank account and such payments are allowed.
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