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Cash expenses (rs:10,000 above limit) include construction account

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Kollipara Sundaraiah

B.com

3025 Points Posted on 02 February 2023

one of the tax audit it person new construction of commercial building started for 22-23.
some construction expenses through on bank online mode
some construction expenses through on cash mode (rs:10,000 limit above) paid.
question:
assessess cash mode payment expenses including or excluded for construction account.

Replies (2)

Quick Summary

This discussion clarifies the treatment of cash expenses exceeding Rs. 10,000 for new commercial building construction. While these expenses may be recorded in your accounts, they can be disallowed for profit assessment under Section 40A(3) and 40A(3A) of the Income Tax Act. Auditors must report such instances, and it's advised to keep cash payments below the Rs. 10,000 limit.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

212447 Points Posted on 02 February 2023

Though it is included in the accounts; but disallowed for assessment of profits or gains under head PGBP as per sec. 40A(3) & 40A(3A) of IT act. Auditor has to report the same in Form 3CA-3CD.