Section 40a(3)

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satyam chyavan

article assistant

30 Points Joined December 2011

Hi!

Under section 40A(3) of The Income Tax Act, 1961, it has been mentioned that any payment made to any person or organisation, except those mentioned under rule 6DD, in excess of 20000/- (except transporter-where the limit is 35000/-), in a single day, other than by way of account payee check or account payee demand draft, shall be disallowed.

I just want to its implication in following case:

A person purchased goods worth Rs. 36000/ and paid the supplier in cash, on 2 different dates Rs. 18000/ each day. whether such payment will be allowed..???

Replies (5)

ashish gupta

student

1922 Points Joined May 2008

yes it will be allowed

Guest

Alloowweddddddddddddddd

satyam chyavan

article assistant

30 Points Joined December 2011

It indicates that there is a big loop hole, as now the question is :

any one can pay as much amt in cash on different days as there are 365 days in a year and say as for eg. if one has to pay Rs. 30,00,000/- he will pay the same in cash in 150 installments of 20000/ each,.on diffrent dates..and then it should also be allowed.

CA LALIT WADHWA

FRESHER

105 Points Joined December 2011

yup allowed

dat limit is 4 payment 2 same persome on same day...

CA Suraj Prasad Shaw

Chartered Accountant

504 Points Joined June 2009

Originally posted by : satyam chyavan
	It indicates that there is a big loop hole, as now the question is : any one can pay as much amt in cash on different days as there are 365 days in a year and say as for eg. if one has to pay30,00,000/- he will pay the same in cash in 150 installments of 20000/ each,.on diffrent dates..and then it should also be allowed.