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40a (3)
Hello
I am in a trading business. When I purchase goods i have to pay freight of Approx. 80000/- in cash to the truck driver when he gives me Builty. Please suggest me what are the maximum limit upto which i can pay in cash without attracting any disallowance and applicablity of any TDS provision on it. please provide practical solution. THANKS
Replies (5)
Dear Sir
As per section 40A(3) of income tax act 1961:-
Any payment made to a Transporter for plying or hirring of transport
- In a single day
- To a Single tranporter
- Is more than INR 35,000.
- Through other than Cheque, A/c payee, Bank is disallowed under section 40A(3) of income tax act 1961.
In Short words :- You can pay freight charges in cash upto INR 35,000 in a single day to Single Transporter
For TDS :-
If Transporter submit a Copy of PAN card than no need to deduct TDS on payment made to Transporter.
pay 80000/- by indicating 3 diff day dates as fright
Thanku Mr. Jay kumar ji..
But what if truck driver does not have any pan or does not provide, how can i escape from tds laws.
You need to have PAN of Transport company and not driver.
In that case you are not provided with PAN , you will have to deduct TDS at the rate of 20%
Agree with mehul shah
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