SEC 40A(3)

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HI FRIENDS I AM WITH A NEW Q???,

WILL SEC 40A(3) DIALLOWANCE COME IN NECK FOR THE FOLLOWING EG:

MR.X HAS  PURCHASE & REPLACED THE TYRES OF HIS TRUCK @ RS.25000 IN CASH,HE IS LIABLE FOR AUDIT U/S 44AB?

Replies (7)

yes....... it should........

Yes the repairs are revenue in nature and will be disallowed.

hi

it is not that kind u/s 269SS as per section cash paid not more than Rs20000 is not allowed if you paid that much, suppose you pay the labours charges and Contractor charges more than Rs20000 disallowed not only for this issue you should deduct the TDs for professional charges, Rent, labour charges, contractor charges, Interest paid to outside party etc it should deduct Tds and remitted to every month 7th or before 7th it is also part of disallowance u/s 40A (iii) 

if the payment is made after 30sep. 09 then it should not be disallowed bcoz the limit extended to rs.35000 for transporter after 30 sep. 09

Dear Darsh*ta,

The payment exceeds Rs.20,000 and hence section 40A(3) is applicable.The payment does not fall under any category specified in rule 6DD.Hence the payment will be disallowed.

Dear Tarun,

The limit of Rs.20,000 has been raised to Rs 35,000 in case payment is made for plying,hiring or leasing goods carriage.Here the payment is made for purchasing and replacing tyres so the limit of Rs.35,000 will not apply.

Any payment made other than by way of an account payee cheque or draft, which is an admissable deduction will be disallowed if it exceeds Rs.20,000..

Hence in this case, Section 40A(3) is applicable....

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