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Section 40A(3)_Cash payment

Ayushi Dubey (7 Points)

11 April 2021

Reliance industries paid 30000 to a transport company in a day. Is the expense Disallowed as per proviso.

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12 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 11 April 2021

No, it will not be disallowed as for transporters cash limit is 35000 rupees in a day, so for 30000 rupees it is allowed u/s 40A(3), no problem

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Ankit Neema (2742 Points)
Replied 11 April 2021

No disallowace, as for Transporter limit is Rs. 35000

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sabyasachi mukherjee (27376 Points)
Replied 12 April 2021

Disallowance while computing profits and gains from business and Profession

expenses greater in cash of 30000 is disallowed and will be considered to be added to profit.

Ankit Neema (2742 Points)
Replied 13 April 2021

Mukherjee JI Please read the section again

CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 13 April 2021

Sabyasachi please read the section

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Puneet Matha (32 Points)
Replied 14 April 2021

No, it won't be disallowed when payment to transporter is upto Rs.35,000

CA Puja Sharma (Chartered Accountant) (4995 Points)
Replied 14 April 2021

Yes, it won't be disallowed as the limit is Rs. 35,000 for transporters

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sabyasachi mukherjee (27376 Points)
Replied 14 April 2021

I assumed its paid in cash.
the section tells that if its Rs
35000 in a single contract or Rs. 1 lakh in a day.
I ASSUMEE ITS PAID IN CASH.
SO HENCE ITS NOT DISALLOWED.

1 Like