40A(3) is applicabe only in respect of an exp which is excess of Rs. 20K. therefore if an assessee makes payment over 20k for two different bills (none exceeding 20k) at the same time in cash/bearer cheque 40A(3) is not applicable. If the payment is made to same person more than 20k in a day sec 40A(3) is appliacable.
Some exception are there. They are covered under rule 6DD.
40A(3) is applicabe only in respect of an exp which is excess of Rs. 20K. therefore if an assessee makes payment over 20k for two different bills (none exceeding 20k) at the same time in cash/bearer cheque 40A(3) is not applicable. If the payment is made to same person more than 20k in a day sec 40A(3) is appliacable.
Some exception are there. They are covered under rule 6DD.
aggregate payment made in cash during any day(not fy) exceeds Rs.20000/- then such expenditure is dissallowed....
yes i agree with manoj
except on payment made on public holidays, remote location where banks are not exist then these payments can be allowed. in case of frieght payment rs.35000 is allowed.
agreed with dhanya
well... dont just limit your words with saying that any expence paid in cash above 20000 against a bill a day is disallowed...
remember there are exemptions to every rule .....
ex. payment made to govt.
payment of teminal benefits like gratuity, retrenchment compensation etc.
and even payments made on a day on which banks were closed either on account of holiday or strike.. etc
agreed with all............the limit is for the day.........so in a year it can be more thn 20000. form tax plannig purpose either u defer payment and pay in istalments and if its not possible than book only 20000 .
payment above Rs.20,000 to a single person on a single day is disallowed but in case of freight the limit is 35,000 from a bill of 35,000 we can pay 19,000 a day and 16,000 other day is allowed
Agreed with Dhanya.
CAclubindia
