Cash payment

40A(3) restricts transaction via cash to one person on a day to rupees 10000 and the excess paid above shall be disallowed. However the exception to the section is that you can pay upto rupees 35000 to a person who is in the business of plying and hiring contract carriages and you can pay even upto rupees 2 lacs to a cultivator to purchase vegeatables and other cultivations which is directly cultivated from his own land. Hence to escape disallowance better make payment through bank channels or any mode other than cash.