Depre allowability Sec 40(A)3

In simple words

Yes Depreciation is allowed

Because Depreciation is Non-cash Expenditure.

Sec.40(A)3 is not applicable for purchase of capital asset not meant for sale

Reference:Circular no.34 dated 05/03/1970

Please find attached to download

Applicability of Sec.40(A)3

So as per circular,

Disallowance under sec 40(A)3 for the payment made in the cash exceedin Rs.20,000 (35000 for payment of goods and carriage ) attracted only incase of revenue expenditure .

If the same is made for procuring Fixed assets like Building,plant and machinery and laptop whatever Then section 40(A)3 not applicable

OTHER DOUBTS ON SEC 40(A)3 AND SOLUTIONS TO THEM

ELECTRICITY BILL PAID IN CASH -SEC.40(A)3

PURCHASE OF CAR IN CASH

CASH PAID MORE SEC.40(A)3

AMMENDMENT OF SEC 40(A)3

PAYMENT TO A PARTY MORE THAN 20000 THROUGH NET BANKING