40a(3)
Pratick Datta (-) (71 Points)
11 September 2016
Whether payment regarding capital expenditure in excess of 20,000/- allowed or not ?
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160692 Points)
Replied 11 September 2016
Section 40A(3) deals with expenditure related to Profits & Gains of Business and Profession.
So, Capital expenditure is Not Disallowed.
Mukesh Kumar
(Accounts Manager)
(1466 Points)
Replied 11 September 2016
YES
AGREE WITH RAMBHIA SIR
BUT AVAID SUCH AS PAYMENT THROUGH CASH IF POSSIABLE
GOOD LUCK!
CA yogesh jain
(job)
(53 Points)
Replied 11 September 2016
You can make cash payment in excess of 20000 for capital expenses.as it is not business exp.
shivaji prasad bhimavarapu
(CHARTERED ACCOUNTANT)
(2391 Points)
Replied 11 September 2016
There is different opinion by Dr Vinid K Singhania in his professional edition of Direct Taxes. Depreciation can not be claimed on fixed assets purchased in Cash if such capital expenditure is more than Rs20,000/-.
However, for future transactions always avoid cash payments in excess of Rs20,000/- even for Capital expenditure.
Dikshit Kapoor
(Article Assistant)
(51 Points)
Replied 12 September 2016
It has been clarified through a board circular issued by CBDT that Purchase Of fixed assets by cash will not be subject to disallowance under section 40A(3) but Installation of fixed asset expenses will be subject to disallowance under 40A(3)
CAclubindia
