Hi,
I have a question relating to payment in cash....
wheather the payment made in cash more than 20000/- to single person in single day on behalf of seller is disallowed...
i have debited the amt to the seller account .... later it will be adjusted against its bill...
Weather it will effect if payment is made to transport co. for freight
Yes...It Will Attract the Concerned Provision...
Refer section 40A(3) of it act
The provisions of Sec 40(a)(3) will be applicable subject to the execeptions given under Rule 6DD.. If your seller or your payment falls under the purview of any of the execeptions of 6DD, tax disallowance will not be applicable. See to it.
Hi..!!!
If you dont adjust and recover the same amount from the seller then this provision in my view would not be applicable..(thought nothing such is written in provision). I would suggest you not to adjust it but show it as that u would recieve it and make such entries.
Apart from this if payment is made to a transporter then limit would be 35000 and not 20000.
u/s 40 A (3) payment made in cash exceeding Rs 20000/- and Rs 30000/- in case payment made to transporter is disallowed . under rule 6DD there is exemption for payment to suppliers, purchasing of fixed assets,etc.
CAclubindia
