Sec 40A(3)

No frnd but have gone thru a reserach during my earlier daz n have also read the memorandum...

hvn't yet had a lukd at your link but surely will hv it.

 sure sir..and thanx a lot for the pains...its nice that i got an expert to solve ma queries...

It's just bcoz tht dere are two bills. It not necessarily mean expenditure under two different heads.

Jst a request brother, pls dn,t address me as Sir.  I'll feel gud if u address me as Tushar.

 If ur saying its cos they are just two bills i guess  Manoharan sirs book and all the links i have posted are wrong.....U can hav a look Tushar.....I am still confused as to what to do if they are two bills of separate heads to same party..But i surely think if they are of same type of expense and paid to single party in a day totalling above 20000 it shall stand disallowed....because if els every1 will start showin an expense above 20000 in a day as two bills below 20000 each and cant be caught..right?

Hareesh,

i'm going thru your links.

Last link you posted deals with advance and that is not covered in 40A(3).

2nd last link itself explains the amendment.

but surely tht fact here still remains thta dere if dere are two bills of amount less than 20,000 then it'll b allowed.

For 40A(3) expenditure and payment both shall exceed Rs 20,000.

yes..it is disallowed..

 Tushar i guess you went thru the same example from the site i posted..right?

To illustrate with an example, let us assume a taxpayer has incurred an expenditure of Rs 40,000/-. The taxpayer makes separate payments of Rs 15,000/-, Rs 16,000/- and Rs 9,000/- all by cash, to the person concerned in a single day. The aggregate amount of payment made to a person in a day, in this case, is Rs 40,000/-. Since, the aggregate payment by cash exceeds Rs 20,000/-, Rs. 40,000/- will not be allowed as a deduction in computing the total income of the taxpayer in accordance with the proposed amendment.

Hareesh,

your example says payments in a day but if u go thru ma example that states three bills for which payment is made in aggregate.

example i quoted is from VG Sir's amendment module, u cn chck on.

I agree with Tarun, the provision u/s 40A(3) is for single exp(bill),single day,single person

 So if u wanna pay more than 20000 in cash u ask the party to break it up to more than a bill with less than 20000 each..then it will be allowed

The amt is allowed .. it is clearly given in the VINOD K SINGANIYA DIRECT TAX RECKNOR PLS REFER THE BOOK .. it is clearly given that if amount paid two different bills in a single day in cash exceeding 20000 it will be allowed.. provided each single bill doesnt exceed 20000 .

 Friends please Read this too

this is a post in lawyers club

The query is not very clear. Presuming that you want to make payment of an amount more than Rs 20,000/- otherwise than by account payee cheque/ bank draft etc. in such case as per current provisions if aggregate of payments made to a single person in a day exceed Rs 20,000/-, the entire payment is disallowed.



Though the above amended provisions effective from 1-4-2009, makes it abundantly clear that the incidence of cash payment to a person in a single day is the fact para materia and not the number of invoices or items of expenses, earlier also a similar stand had been upheld in the case of CIT vs Shanmuga (146 ITR 600).



Hence, as of now any single or multiple cash payments to a single person in a day aggregating more than Rs 20,000/- shall be disallowed irrespective of number of invoices except under certain specified circumstances considering business expediency and other factors (refer rule 6DD).

https://www.lawyersclubindia.com/experts/experts_message_display.asp?group_id=48806

 And friends i was also said by an expert that there is another new amendment aftr FY 08 09 which says it wnt be disallowed if paid in separate bills..so please clarify as to the latest situation