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Section 40a(3)

Tax queries 1018 views 4 replies

CA KAMAL DULANI

MANAGER AUDIT

86 Points Posted on 24 April 2012

I have a query that as we know the budget 2008 increased the cash payment to transporter limit from Rs. 20000/- to 35000/-

but i am not clear that the said limit is against one transporter or one GR

kindly let me know-- if payment is made in cash Rs. 75000/- per day freight against 5 seperater GR to same person.

is Section 40A(3) Attracts

If there is any case law kindly give

Replies (4)

Prateek Agarwal

Sr. Executive - Finance & Accounts

1732 Points Posted on 24 April 2012

Sec 40A(3) states that any expenditure made to a person otherwise than by way of account payee cjeque or bank draft exceeding 20,000/- and 35,000/- in case of transporters shall not be allowed as deduction.

So, when you haev paid 75,000/- to a single person in cash, it would attract Sec 40A(3), irrespective of the fact that it has been paid for separate GR.

Regards

Prateek

valji

Accounts manager-MBA

2150 Points Posted on 24 April 2012

agreee with above

Guest

cash payment in excess of 30,000/- in a single day to a same party is disallowed under 40(a)3.

CA Arindam Sain

Practice

308 Points Posted on 24 April 2012

AGGREGATE of payments made to A person in A DAY , exceeds Rs.35000/- for above case,,,,so it is evident from the language of provision that..in your case is come under the disalowance u/s40A(3)