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sec 40(A)3

Tax queries 512 views 2 replies

Hi,

Pl tell me whether Sec 40A)3 gets attracted to following payments:

1) If cash is paid to any person as advance for expense/or for other than expense exceeding Rs. 20000/-

2) If cash is paid to an employee/staff by way of loan/advance exceeding Rs. 20000/-

wani.

Replies (2)

/forum/sec-40-a-3-68372.asp

Hai,

40A(3A) Where an allowance has been made in the assessment for any year in respect of any liability incurred by the assessee for any expenditure and subsequently during any previous year (hereinafter referred to as subsequent year) the assessee makes payment in respect thereof, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, the payment so made shall be deemed to be the profits and gains of business or profession and accordingly chargeable to income-tax as income of the subsequent year if the payment or aggregate of payments made to a person in a day, exceeds twenty thousand rupees:

frds from the Above section it is clear that any exps treated in earlier year and in the subsequent year payment was made if it is in excess of Rs.20,000/-,then such amount become taxable in th subsequent year.


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