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exp allowed u.s 40a
whether payment made to creditor in cash in excess of rs 20000 is eligible for deduction or not. or the purchase made from these creditor will be disallowed by assessing officer.
Replies (3)
You cannot make payment to creditor in excess of 20000 in cash in one single day. If you do it will be disallowed. If the payment is made on different days then there is no bar on making such payment.
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on this link i have read this please clarify my what does it mean.
RULE 6DD: EXCEPTIONS TO PROVISIONS OF SECTION 40A(3)
No disallowance of expenses exceeding Rs. 20,000 in a day made otherwise than by an account payee cheque or account payee bank draft should be made in case of the following expenses:-
4. Where the payment is made by way of adjustment against the amount of any liability incurred by the payee for any goods supplied or services rendered by the assessee to such payee
on this link i have read this please clarify my what does it mean.
RULE 6DD: EXCEPTIONS TO PROVISIONS OF SECTION 40A(3)
No disallowance of expenses exceeding Rs. 20,000 in a day made otherwise than by an account payee cheque or account payee bank draft should be made in case of the following expenses:-
4. Where the payment is made by way of adjustment against the amount of any liability incurred by the payee for any goods supplied or services rendered by the assessee to such payee
That means through journal entries. That is acceptable but you say cash then it will be disallowed.
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