Like to know the applicability of Sec 40A(3) of the incometax Act if Salay is paid Rs21000/-in cash?
CA Saiyum khan (Practicing CA) 30 August 2012
20% of salary amount would be disallowed as per sec. 40A(3).
Bharath (C.A,C.S) 30 August 2012
Section 40A(3) of the income tax act says that if the assessee makes any payment or receipt, expect from cross payee cheque or dd or any banking mode, exceeding Rs. 20000 to a single party is disallowed and treated as the personal expenditure or receipt of the assessee.
but disallowance will not operate if
M.Muthukumar (Chartered Accountant) 30 August 2012
100% of the salary expense will be disallowed if the payment is made to a single person on a single day...
Vaibhav Jandey (Life iz Hard; I'm Harder) 01 September 2012
The entire amount Rs 21000 is inadmissible in the first instance..
But in some exceptional cases as mentioned above by the user Bharath; it would be admissible.
Tony John (Chartered Accountant) 01 September 2012
The payment will be fully disallowed as per IT Act.
Akshaydeep Tarachand Dhoot (Account and Audit Assistant) 01 September 2012