rule 6DD

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Hi Ankit,

Section 40A(3) of the Income Tax Act 1961 disallows any revenue expenditure made in cash over the amount of Rs 10000 by any business. Whereas Rule 6DD of Income Tax Rules 1962 specifies certain transactions on which this Section 40A(3) shall not apply and thus cash expenditure over 10000 can be undertaken on these prescribed transactions without attracting disallowance.

Some of the transactions covered in Rule 6DD are :

• Payment to RBI, SBI, LIC, Government 
• Payment on the day of Bank strike or Bank holiday
• Payment made for purchasing agriculture produce forest produce, fish etc