Is the expense allowed under sec. 40 a (3) , if any payment for expenses made in advance to a single party and the amount exceeds Rs. 20,000/- in a particular day.?
12 Replies
CA. Ankit Bhansali
(---)
(120 Points)
Replied 08 March 2013
no expense would not be allowed even though its in advance
anirban dev
(....... :))
(151 Points)
Replied 08 March 2013
I think Expenses would be disallowed unless it falls within the Exceptions mentioned in Rule 6DD
CA Adesh Gupta
(Finance Manager)
(160 Points)
Replied 08 March 2013
| Originally posted by : Anik Sen | ||
 |
Is the expense allowed under sec. 40 a (3) , if any payment for expenses made in advance to a single party and the amount exceeds Rs. 20,000/- in a particular day.? |
i) When payment is required to be made on a day when banks are closed either due to public holiday or strike ii) When Payment is made at a place which is not connected by banking channel
I hope it helps |
The Exp will be disallowed if it is paid in any mode other than by A/c payee cheque or bank draft. However there are certain cases mentioned in Rule 6DD in which payment made by cash exceeding Rs 20000 can be claimed as deduction. Some of the cases mentioned in Rule 6DD are
CA Adesh Gupta
(Finance Manager)
(160 Points)
Replied 08 March 2013
The Exp will be disallowed if it is paid in any mode other than by A/c payee cheque or bank draft. However there are certain cases mentioned in Rule 6DD in which payment made by cash exceeding Rs 20000 can be claimed as deduction. Some of the cases mentioned in Rule 6DD are
i) When payment is required to be made on a day when banks are closed either due to public holiday or strike
ii) When Payment is made at a place which is not connected by banking channel
I hope it helps
S.GANESAN
(AUDIT MANAGER)
(110 Points)
Replied 08 March 2013
Dear Anik,
If the payment is made towards expenses it is disallowed U/s.40A(3).
Initially advance made for expenses and subsequently it is adjusted with bill amount (i.e expenses) it is disallowed only.
Anik Sen
(Article Assisstant)
(156 Points)
Replied 09 March 2013
Now suppose a director of a company is paid rs.25,000 on a single day for various expenses to be incurred during the month(expenses incurred to different parties) n he also provides the various bills of different dates.will then be the expenses disallowed?
satish kumar Chauhan
(accountant)
(359 Points)
Replied 09 March 2013
Dear Anik
in your case no expenditure can be disallowed, as these type exps like peety expenses which are paid as cashiier or firm represenatatives
CA Deepak Rathore
(EXPERT)
(281 Points)
Replied 09 March 2013
i think it depends on billing ???
suppose this advance is given against multiple bill(5000+14000+2000)=21000, allowed
In short,
this is disallowed only if single bill payment exceed 20000/-
CA. Ankit Bhansali
(---)
(120 Points)
Replied 09 March 2013
expense above 20000 to single person on single day is disallowed so if we go as per ur example than disallowance would not be attracted
CA Deepak Rathore
(EXPERT)
(281 Points)
Replied 09 March 2013
ya but i have read some where that k
it totally depend s upon bills amount
i think
CA.D.RAGAVAN
(CHARTERED ACCOUNTANTS)
(219 Points)
Replied 09 March 2013
Billing aspects Comes only for Subsequent Payments. A Payment made against multiple Bills Where each Bill is below Rs.20000/- will not be covered u/s.40A(3). Advance Payment above Rs.20000/ towards cost and services attracts Section 40A(3)
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