Income tax

section 40(A)(3) provides that any expenditure incurred by an assessee (whether individual, company, firm etc.) above Rs. 20000/- other than by account payee cheque or draft shall not be allowed as a deduction. Simply put, this section covers those payments over Rs. 20000/- made by bearer cheque or cash. and this is for buyers::::::::::::: Now 206(1D) says that the seller shall collect tax at the rate of 1% from the purchaser on sale in cash of any goods (other than bullion and jewellery) or providing of any services exceeding two lakh rupees.:::: Sec 40A(3) is about dis-allowance of payment as expenses if it is pain in cash above certian limit where as the later one speaks about to collect TCS on Cash sales if it cross certain limit.

for goods its 35000/- from 20000/- enhanced in 40(A)(3) clearly mentioned, so can you pls clarify diff between above section and 206(1D) in sale and purchase of goods by receiving cash payments more than 35000/-

so any business person can collect cash beyond 20000/- from their buyers upto 200000/- with out collecting tds according to section 40(a)(3)

the voilation of act is done only by buyer not seller according to 40(a)(3)

sir no penality will be imposed to seller in such case?

if buyer is buying form his drawings this is not applicalble for buyers also ?

sir can any body expalin briefly the difference between 40(A)(3) and 206c(1D)

every dealer has confussion between these two acts