Maximum cash payment per day to transporter

Section 40A(3) Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure.

Provided further that in the case of payment made for plying, hiring or leasing goods carriages, the provisions of sub-sections (3) and (3A) shall have effect as if for the words "twenty thousand rupees", the words "thirty-five thousand rupees" had been substituted.

         Provisions in the Act clarifies itself.

SEC 40A(3) STATES THAT IF THE AGREEGATE OF AMOUNT PAID ON A DAY MORE THAN 35,000 IN CASE OF PLYING OF GOODS CARRIER EXCEPT BY MEANS OF CHEQUE DRAWN ON A BANK,THEN THE TOTAL AMOUNT IS DISALLOWABLE.

IF THE PAYMENT IS MADE ON A DAY THEN 35,000 IS APPLICABLE AS MAXIMUM CASH PAYMENT ON OVERALL NOT ON EACH CONSIGNMENT.

IF THE PAYMENT IS MADE ON DIFFERENT DATES FOR DIFFERENT CONSIGNMENTS THEN 35,000 IS APPLICABLE FOR EACH CONSIGNMENT.