Is section 40a 3 applicable to trust

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.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 30 September 2026
CA Article Assistant

CA Suraj Garg & Associates

New Delhi

CA Final

View Details
Company
Featured 12 September 2026
Assistant Manager - Finance & Compliance

Naveen Fintech Pvt Ltd

Kolkata

CA Inter

View Details
Company
30 September 2026
Senior Accountant

Codeboard Technology

Chennai

B.Com

View Details
Company
09 September 2026
Semi Qualified CA / CA Inter - 2 Groups Cleared

Getmyca Consultant Pvt Ltd

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 28 September 2026
Junior Accountant

J S P M & Associates LLP

Pune

B.Com

View Details
Company
ARTICLESHIP 16 September 2026
CA Article Trainee

SR BAGAI & Co.

New Delhi

CA Inter

View Details
Company
26 September 2026
Chartered Accountant

pushpganga ventures

Pune

CA

View Details
Company
Featured ARTICLESHIP 06 October 2026
Semi Qualified

AJAY SINGH AND CO LLP

Thane

CA Final

View Details