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Payment more than 20000

Others 943 views 5 replies

A Ltd a company purchases goods from B Ltd for Rs.2,00,000/- A Ltd pays Rs.1,00,000 in an account payee cheque and rest in cash on 5 different days. Does it lead to disallowance.

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Replies (5)

No, since the payment has not exceeded Rs.20,000/- on a single day.

 d cash payment should b more den 20000 for disallowance in a single day 

since in dis case it is 20000 and on diff. dates 

so it is fully allowed.. 

actual when payment made for labour or transport it is not valid to pay more than 20000 in cash for payment against purchased it is allowed.

payment made in cash in excess of Rs. 20000 made in different day is allowed under the income tax act.

The main intention of Sec 40A(3) is to restrict the cash payments in excess of Rs.20000 in aggregate (to curb the black money in general) . If the invoice is for the entire 2 lakhs, the cash payments made on different dates will be disallowed. However, if invoices are of different amounts with different dates, then the same can be allowed. Otherwise, the main objective of that section itself will get defeated.


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