If a person deposits an amount exceeding Rs. 20,000.00 in the bank account of his creditor towards payment to be made by him to the creditor, will the amount be disallowed?
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Section 40A(3)
Replies (3)
There is no exception in Rule 6DD w.r.t deposit of cash in the account of supplier/creditor. I feel, therefore, the payment will be disallowed.
Deposit in bank account of creditor amounts to cash payment only. Only difference is instead of he would have deposited you deposited for him. Thus This is falling under purview of Sec 40 A (3).
But if you make account transfer of the amount from your company account to creditors account, the amount wont be disallowed
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