Violation of sec40a(3) of income tax rule
This query is : Resolved
31 January 2014
Books of company shows a travelling expenses of Rs.100000 for which cash payment has been made similarly for the same purpose it has withdrawn a cash from its bank of Rs. 100000i.e at first it withdrew a sum of Rs.100000 from bank and paid to the concerned party. does this transaction violates the provision of Sec40A(3) of Income tax. I would be Grateful to anyone who could solve my query.
31 January 2014
Since the payment for the expense has been made by way cash, Section 40A(3) is applicable and no deduction shall be allowed for the travelling expense.
31 January 2014
If the payment has been made on a single day then it will be disallowed. If made in parts not exceeding 20000 a day it will be allowed.
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