Can we make payment exceeding Rs 20000 in case of single outstation purchase in cash?
11 Replies
Reetika Goel
(Qualified Chartered Accountant)
(565 Points)
Replied 08 September 2008
As per section 40A(3), any payment exceeding Rs. 20,000 in cash will be disallowed in Toto.
With reference to the above section, you will have to make payment by cheque only in order to prevent violation of Section 40A(3).
The fact that it is the only outstation purchase does not fall in the exceptions to this section.
Suresh
(Service)
(91 Points)
Replied 08 September 2008
| Originally posted by :Reetika | ||
| " | As per section 40A(3), any payment exceeding Rs. 20,000 in cash will be disallowed in Toto. With reference to the above section, you will have to make payment by cheque only in order to prevent violation of Section 40A(3). The fact that it is the only outstation purchase does not fall in the exceptions to this section. |
" |
Suresh
(Service)
(91 Points)
Replied 08 September 2008
| Originally posted by :Reetika | ||
| " |
As per section 40A(3), any payment exceeding Rs. 20,000 in cash will be disallowed in Toto.
I understand that payment of cash in excess of Rs.20,000/- under sec 40A(3) is only applicable to repayment of loan and not for purchases. |
" |
CA. Dashrath Maheshwari
(TaXpert)
(15108 Points)
Replied 08 September 2008
If there is no bank in that 'outstation' or seller is offering more discount on cash purchase then only you can pay more then 20000 by mode of Cash, towards purchases.
**DM
Devendra Goyal
(Service)
(24 Points)
Replied 08 September 2008
Hello,
There are 9 to 10 Exceptions where the payment can be made in Cash above Rs 20000. in Ealier Year 20% of Amount paid is disallowed from your expenses but now 100% of your amount paid in cash above Rs.20000 is disallowed so be careful do not paid Amount in Cash above Rs 20000 except allowed in rule 6 under the Income tax act 1962.
C.A.Devendra Goyal
Dy.Manager Accounts
KCIL, Ankleshwar.
barkat ali
(auditors)
(32 Points)
Replied 09 September 2010
hi members
my client haspurchased some 600 advertisiment bags(like school bags) he had got the bill for rs,15000/- per bill for the same he had paid cash of around rs,15000/- per day .
my question is that he had purchased the bags from one dealer and had make the payments for 15000/- per day ( payments made for seperate bill of each bill of rs,15000/-)
regards
barkat ali
Hemu Kapoor
(CA - Final Student)
(158 Points)
Replied 09 September 2010
| Originally posted by : CA. Dashrath Maheshwari | ||
 |
If there is no bank in that 'outstation' or seller is offering more discount on cash purchase then only you can pay more then 20000 by mode of Cash, towards purchases. **DM |
 |
vivek
(Auditor)
(61 Points)
Replied 22 February 2011
whether more then 20000 pay in cash to electricity(Gov) department is liable to disallow u/s 40A(3
vivek
(Auditor)
(61 Points)
Replied 22 February 2011
whether cash more then 20000 directly deposit in party bank account via deposit slip is disallowed U/S 40A(3)
Plz answer this question
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