Advance for expenses

payment made in nature of advance above 20000 in cash with attract the provisions of Sec 40A(3)

 advance also attracts sec 40A(3)

As per sec 40A(3) expenditure incurred for which payment is made otherwise than account payee cheque/bank draft will attract disallowance.

so in the present case advance is only paid. But expenditure not yet incurred. But when the actual expenditure is recognised 40A(3) will attract.

So at the time of making advance 40A not attract, but when expenditure recognised 40A attracts. so sometimes year of attraction of disallowance may be postponed.

clearly described by arun

thanx

can not b given in cash