Income tax section 40A(3)

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90 Points Posted on 22 February 2021
can advance paid to employee rs 12000 allowed as per section 40a(3) because payment exceed 10000 in case
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On 22 February 2021 at 17:28 Report
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This discussion clarifies the application of Section 40A(3) of the Income Tax Act regarding cash payments. If an advance of over £10,000 is paid to an employee in cash, it will likely be disallowed. However, if the advance is treated as a current asset rather than an expense, the disallowance under Section 40A(3) may not apply.

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Chartered Accountant
24588 Points Posted on 22 February 2021
Is it in cash??
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On 22 February 2021 at 20:40
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Chartered Accountant
86505 Points Posted on 22 February 2021
Yes disallowed as no cash payment allowed more than Rs. 10000/-
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On 22 February 2021 at 20:48
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Chartered Accountant
24588 Points Posted on 22 February 2021
If it is in cash then it will be disallowed
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On 22 February 2021 at 22:48
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Partner
1072 Points Posted on 23 February 2021

The advance is not expense but shown under other current assets so no need to claim exp and thus no question to disallow it

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On 23 February 2021 at 17:27

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