Cash Pmt above Rs. 20,000/-

But in Income tax wht you can not do directly you can not do indirectly. There are loofalls but yu can not take away benefits in every case.

So i think you will not get expenditure allowed.

Under SEction 40 (a) (3) i f an assessee incurs any expenditure in respect of which payment iin excess of Rs. 20,000is made otherwise tahn by an daccount payee cheque or an account apyee bank draft, 100 percent of such expenditure will be be allowed as a deduction.

The following are the exceptions to the above rule:

1. Payment made of banking and other credit institutions such as the RBI , Commercial Banks, CO-operative Banks and LIc etc..

2.Payment made to State of Central Govt.

3. Paymetnn through the banking system e.g letter of Credit, mail or telegraphic transfer , buk adjustmet in the same bank of between other banks, bill of exchnage made payable only to a bank , ECS , a credit or debit card.

4. Payment made by book adjustment by an assessee in the acoount of the payee against money due to the assessee for any goods supplied or services rendered by him to the payee.

5.Payment to ta cultivator. producer in respect of the purchase of agricultural or forest produce or product of animal hubandry or diary or polutory farming.

6. Payment made to a prodcucer in respect of teh purchase of the products manufactured or processed without the aid of power in a cottage industry.

7. Payment made to a person who ordinarily resides or carries on business ina village not served by any bank.

8. Payment of Terminal benifits like gratuity, retrenchment compensation etc, not exceeding Rs. 50,000,

9. Payment required to be made on a day on which the banks were closed either on account of holiday or strike .

10.Payment made by any person to his agent whi is required to amke payment in cash for goods or services on behalf of such person.

11. Payment smade by an authorized dealer or a money changer against purchase of foregin currenty or travellers cheques in the normal course of his business. 

As in your case the condition in not as per the exceptions so you are not allowed to claim that expenditure while calculating your income.

i hope this will solve your problem.

Regards,

Parveen Thakur 

The motive is to stop cash payments above 20000, not merely to disallow the expense. So in your case it shall be disallowed.

section 40A(3) will not applicable in case of capital expendiyure

only consist for revenue expenditure

for more ref. pls see Rule 6 D & 6DD

The exception to Sec. 40A(3) also states that the section doesnot apply to the payments made to acquire and fixed asset or any capital expenditure.

This section doesnot have any effect on Capital Expenditure.

Hi Mr. Harshal.

As you are asking that you have made cash payment of more than Rs. 20,000. it is a capital expenditure and will be added in the the block of assets. there is no questino of claiming deduction as it wont apper in the Profit and loss account.

Hope you will find this information useful.

Regards\

Vijay Kumar 

Nothing has been specified in the act regading exemption from sec 40A(3) to cash payment above 20000 to capital expenditure.

When a capital expense(such as installation of softwares) can be disallowed if no TDS has been deducted on it, then why cant the cash payment above 20000 be disallowed.

Mr. Repulsive Devil,

Section 40(a) (3) restricts claiming dedution for EXPENDITURE INCURRED which is shown in P&L ACCOUNT. as the purchase of CAPITAL GOODS will not appear in P&L Account then there is NO question of claiming Deduction.

Reagrds

Vijay Kumar