Section 40a(3)

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Querist : Anonymous

Querist : Anonymous (Querist)

23 August 2011 Respected sir
i have query regarding section 40A(3).if cash withdraw by a partner exceeding rs.20000/- in a single day in his partnership firm.Is this amt allowable or not?thanks in advance.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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23 August 2011 If any expenses booked against the withdrwal more than Rs.20000 then it will be disallowed u/s.40A(3) subject to rule 6DD

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Querist : Anonymous

Querist : Anonymous (Querist)

23 August 2011 respected sir
that means partner can withdraw excess Rs. 20000 for drawing.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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23 August 2011 Yes. Section 40A(3) applies on expenses which you are claiming in Income tax, so Drawings not an expenses, so sec.40A(3) not applicable on that

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