allowance of cash purchaeses

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is cash purchases allowable in IT act? if yes, to what extent?

Replies (9)

According to me, it is taxable because it is part of other Allownces as per Income Tax Act

the cash purchases are what?

Capital asset purcahses

Revenue item purchases?

For revenue items upto Rs. 20,000 is allowable in excess of that 100% disallowable under IT Act,

Exemption is given for pirchase of capital asset

they are purchases in normal trading,i.e, revenue. the threshold of Rs.20000 is annually or daywise..i mean i need a little more specification

incase of revenue items upto 20000 (per day to a single supplier )is allowable and 1/5th of any amount in excess of 20000 is disallowed

though there are some exceptions to this rule.

in case of purchase of capital items there is no such limit

thanks for the information...i hope per day per supplier is correct coz i am moving ahead with it now but sir u need an updation its no more 20% tht is disallowable,as per the amendment it is 100 % now 

In case of Purchase of revenue items upto 20000 (per day from a single supplier )is allowable and If Cash Purchase (per day to a single supplier ) are in excess of Rs. 20000 then whole amount of purchase is disallowed.

Exception to these are in Rule 6DD of Income Tax Rules. 

There are no disallowance in case of puchase of capital asset.

 

I understand that if a single payment exceeding Rs 20K will attract section 40(a)(3).

So,if  total payment to a single supplier exceeding Rs 20 K in mutiple voucher/bills where each voucher/bill is of less than Rs 20K then amount should not be disallowed.

 

Originally posted by :Omkar
" I understand that if a single payment exceeding Rs 20K will attract section 40(a)(3).
So,if  total payment to a single supplier exceeding Rs 20 K in mutiple voucher/bills where each voucher/bill is of less than Rs 20K then amount should not be disallowed.
 
"


 

Originally posted by :Omkar
" I understand that if a single payment exceeding Rs 20K will attract section 40(a)(3).
So,if  total payment to a single supplier exceeding Rs 20 K in mutiple voucher/bills where each voucher/bill is of less than Rs 20K then amount should not be disallowed.
 
"


 

if  any hotel purshases Rs.25,00,000.  and payment without tds deducted  all amount disallowed or not.

 

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