banner_ad

Is section 40a 3 applicable to trust

Tax queries 532 views 1 replies

Is section 40a 3 cash payment limit applicable to trust 

Replies (1)

Section 40A(3) of the Income-tax Act, 1961, restricts the allowability of expenses or payments made in cash exceeding ₹10,000 (or ₹35,000 in case of payments to transport operators) in a single day.

Applicability to Trusts -

 *Yes, Applicable*: Section 40A(3) applies to all assessees, including trusts.

Therefore, if a trust makes a payment in cash exceeding the specified limit, the excess amount will be disallowed while computing the trust's income. Key Considerations - 

*Cash Payments*: The restriction applies to cash payments, not payments made through other modes (e.g., bank transfers, cheques, digital payments). -

 *Single Day*: The limit applies to payments made in a single day, not aggregate payments over a period. Implications for Trusts

- *Disallowance*: If a trust makes a cash payment exceeding the limit, the excess amount will be disallowed while computing its income, potentially leading to higher tax liability.

 Trusts should ensure compliance with Section 40A(3) to avoid disallowance of expenses and potential tax implications.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 29 April 2026
Manager- Finance and Compliance

Naveen Fintech Pvt Ltd

Kolkata

CA Inter

View Details
Company
Featured 28 March 2026
CA Final

Ashok Amol & Associates

New Delhi

CA Final

View Details
Company
Featured ARTICLESHIP 19 March 2026
Article Assistant

Gupta Sachdeva & Co. Chartered Accountants

New Delhi

CA Final

View Details
Company
Featured 14 April 2026
GST CONSULTANT

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 28 March 2026
Accountant

Ashok Amol & Associates

New Delhi

B.Com

View Details
Company
Featured 13 April 2026
GST CONSULTANCY

Abhishek G Agrawal & Co.

Korba

CA Final

View Details