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Cash payment limit if expenditure deducted tds

Internal Audit 3084 views 3 replies

what is the limit to pay the cash to party / service provider / contractor if expenditure had deducted the TDS other than Transport charges head

 

Replies (3)

None can make the payment above Rs. 20000/- by cash (single transaction).

also on single day to same party by multiple transactions

o Section 40A(3) of Income Tax Act 1961 provides for disallowance of expenses
 in respect of which a payment or aggregate of payments made 
 to a person in a day, 
 otherwise than 
 by an account payee cheque drawn on bank or account payee bank draft, 
exceeds Rs 20000.
Generally such expenses are disallowed,unless a few criteria as per the provision are satisfied


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