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Section 40(A)(3) : Planning for disallowance of cash expenses above 10000

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Ashu jain

Practicing

126 Points Posted on 05 February 2020

If we incur cash expense on purchase of goods of 49000 (including GST). Can we pay and break the cash payment in 5 days to prevent the disallowance of section 40(A)(3) under income tax.

Thanks & Regards

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Quick Summary

This discussion explores strategies to avoid disallowance of cash expenses exceeding £10,000 under Section 40(A)(3) of the Income Tax Act. Participants discuss breaking down large cash payments over several days as a potential tax planning method. However, it's advised to ensure that goods are billed accordingly to support such arrangements.