Payment in excess of Rs 20000 in cash

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.

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

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.

..

 bear cheque issued on personal name and amount is above 20000, whether bank can pay cash to the payee or though account only

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

whether more then 20000 pay in cash to electricity(Gov) department is liable to disallow u/s 40A(3

whether cash more then 20000 directly deposit in party bank account via deposit slip is disallowed U/S 40A(3)
Plz answer this question