Section 40a(3)

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rohit kumar (Querist)
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06 June 2012 What if an salary paid to an employee more than 20000 will it be allowable as a business expenditure??????

What if an expenditure incurred rs 38000 for purchasing of 2 tyres from the same party and that party issue 2 different bills for rs 18000 each then will it be allowable as a business exp ..???Plz Reply

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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06 June 2012 1. Salary will be disallowed if the amount exceeds Rs. 20,000 and is paid in cash.

2. If payment for both the bills is made on the SAME day, then the expense shall be disallowed.

rohit kumar

rohit kumar (Querist)
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06 June 2012 but provision is saying that disallowability will not be made if separate bill be issue?? is it so...

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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07 June 2012 If the payment is made to a single employee, expense shall be disallowed.

If the payment is made to multiple employees and individual payment does not exceed Rs. 20,000, then the expense will NOT be disallowed.

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Section 40a(3)

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