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Electricity Payment

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BHARATH MALI

Assistant of Audit

20 Points Posted on 26 January 2020

Can a Propreitor Pay Electricity Bill in Cash Rs. 11450/-

Section 40(a)(3) ??

Replies (8)

Quick Summary

This discussion clarifies whether a proprietor can pay electricity bills in cash exceeding Rs. 11,450 under Section 40(a)(3) of the Income Tax Act. The consensus is that cash payments are permissible and will not be disallowed as expenditure, provided the payment is made to government or Government of India controlled State Electricity Boards, not private distributors. Case law suggests this is acceptable, especially when adhering to Rule 6DD.

Kapadia Pravin

20 Points Posted on 26 January 2020

Yes he can very well pay. it will not be dis-allowed under 40A(3)

BHARATH MALI

Assistant of Audit

20 Points Posted on 26 January 2020

Any case law regarding this matter please

Kapadia Pravin

20 Points Posted on 26 January 2020

No. of case laws are there
payment of electricity bill should not be to a private power distributor company.

All government or GoI controlled State Boards are ok for cash payment

RAJA P M

"Do the Right Thing...!!!"

20 Points Posted on 26 January 2020

@ Mr BHARAT MALI.,

The Cash Payment above 10k to electricity is allowed as expenditure and it's not disallowed. Refer the same section with rule 6DD...

Also follow the suggestion by Mr Kapadia Pravin...