40a(3)

 Whether advance paid for any purchase/ expenses exceeding Rs. 20000 will violate Section 40A(3)?

Replies (12)

yes it will violate...but there are some exceptions to purchase 

refer the link....hope your query is solved

https://www.simpletaxindia.net/2009/12/payment-exceeding-20000-40a3-exceptions.H T M L

https://www.charteredclub.com/section-40a3/

yes it will violate the section... Advance purchase expenses whatever it is .....

Yes it is voilation if u make payment in cash
Yes.. Payment should not be in cash..
Agreed wid all above
Yes to same person same day for same activity. ...
whether payment to a single party in cash on same day, but i am in doubt
yes it will violate.
Can the transaction of advance payment be shown as a loan?
Yes it will violate the provision.
Yes, It will violate provisions u/s.40A(3). So amount paid as advance to party will be disallowed in the year in which you claim such expenses in profit and Loss account. It is not matter whether you paid amount for a single bill or for multiple bills and it is the matter whether aggregate amounts paid to a single person in a single day exceeds Rs.20,000. If you treat it as Unsecured Loan then there will be no problem to you but problem exists for receiver as it amounts to 269SS violation (Acceptance of Loan in cash in excess of Rs.20,000) which will leads to penalty equal to violation amount.
Payment made to Municipal Corp. exceeding Rs.20000/- is allowed or not ????

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 08 July 2026
Article internship

AJAY SINGH AND CO LLP

Thane

CA Final

View Details
Company
ARTICLESHIP 23 July 2026
Article

Gianender & Associates

New Delhi

CA Inter

View Details
Company
Featured 16 July 2026
Semi Qualified Company Secretary

Vakilsearch.com

Chennai

CS

View Details
Company
06 July 2026
Chartered Accountant (Indirect Taxation)

Gowra Ventures Pvt Ltd

Hyderabad

CA

View Details
Company
ARTICLESHIP 14 July 2026
Article Assistants

R Shyam and Associates

New Delhi

CA Final

View Details
Company
29 July 2026
ACCOUNTANT

ONESTEP GST SOLUTION

New Delhi

B.Com

View Details
Company
ARTICLESHIP 16 July 2026
Article Assistant

Sahil Agarwal & Company

Mumbai

CA Inter

View Details
Company
Featured 02 August 2026
Accounts Executive

Aashok F&C Advisory

Guwahati

CA

View Details
Follow