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Section 40a(3)

Sanjay Joshi (Intern) (28 Points)

27 June 2014

Wether provision contained under Section 40A (3) will be applicable if multiple payments are made to a single party less than Rs. 20,000 but aggregate exceeds Rs. 50,000.

All payments are against different bills in a single day ??

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17 Replies

CA Pooja Sharma (Chartered Accountant) (192 Points)
Replied 27 June 2014

Section 40A(3) shall be applied only if both the conditions are satisfied i.e. Cash Payment exceeds 20,000/- & Biil amount exceed 20,000.

Sanjay Joshi (Intern) (28 Points)
Replied 27 June 2014

So in my case it is not applicable. Since bill amount doesn't exceeds Rs. 20000

CA Ramsai N (Fresher) (594 Points)
Replied 27 June 2014

Originally posted by : Sanjay Joshi
	So in my case it is not applicable. Since bill amount doesn't exceeds Rs. 20000

Sec 40A(3) does talks about the payment for expenditure to a single person in a single day (may be for multiple bills also) exceeds 20,000/35,000.

So your transaction falls within ambit of 40A(3).

CA Pooja Sharma (Chartered Accountant) (192 Points)
Replied 27 June 2014

But i think biils wouold be clubbed if they are of same date otherwise not.

Shubham Gautam (Student) (28 Points)
Replied 27 June 2014

In ur sec.40A(3) will not apply... since for its applicability single bill amount must exceed 20,000 and also aggregate payment must exceed 20,000 in a single day to a single person....Aggregate of bill is not done,aggregate of only payment is done

CA SUKSHAM ARORA (CA) (569 Points)
Replied 27 June 2014

ACCORDING TO ME , SEC. 40A(3) WOULD NOT APPLY IN UR CASE

Sanjay Joshi (Intern) (28 Points)
Replied 27 June 2014

It is Travell agency

Bill no. 829 to 842 dated 7 March, 2014

Amount: 95,780

Sneha dagli (étudiante) (197 Points)
Replied 27 June 2014

I AGREE WITH RAMSAI NEELAM.

SINCE PAYMENT IN SINGLE DAY TO SINGLE PERSON EXCEEDS RS 20000 SEC BECOMES APPLICABLE

1 Like

Fenil Shah (Audit & Tax Executive) (402 Points)
Replied 27 June 2014

Originally posted by : Sneha Dagli
	I AGREE WITH RAMSAI NEELAM. SINCE PAYMENT IN SINGLE DAY TO SINGLE PERSON EXCEEDS RS 20000 SEC BECOMES APPLICABLE

I agree with Sneha Dagli !!

1 Like

rohit (student) (72 Points)
Replied 27 June 2014

Section 40a(3) becomes applicable when aggregate of payment made to a single party in a day exceeds Rs 20,000. Hence, no matter the payment is made on different invoices, sec 40a(3) becomes applicable in your case.

Hemant (Aprentise) (21 Points)
Replied 27 June 2014

Yes sec applied, since payment in a single day exceeds Rs. 20000 to the same person

Pooja (Final CA) (502 Points)
Replied 28 June 2014

Provisions of sec 40A(3) are applicable if :

1. The aggregate of payments in Cash, made to a Single Person in a Single Day for the Same work exceeds Rs. 20000.

2. The limit is Rs. 35000 in case of Goods transport agency.

3. If payment is made to single person in single day but for Different works, then the payments in cash will not be aggregated (since only payments for same work is aggregated)

Since in your case, the amount in respect of Cash payments exceeds the given limits, the provisions of the section are applicable.

1 Like

S.GANESAN (AUDIT MANAGER) (110 Points)
Replied 28 June 2014

Since the CASH Payment to the Single Party on a single day Exceeds Rs.35,000/- Sec.40A(3) is applicable. Dont worry about single bill r multiple bills. Sec.40A(3) is speaking about only CASH Payment to the single person on a single day.