Section 40A(3) cash transaction limit

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CMA
32 Points Posted on 05 February 2021

Whether disallowance of cash transaction will applicable if expenditure in a day more than 10000 and bill amount of that particular day more than 10000, but payment in cash in 2 days?

Suppose expense in a day of Rs 18000, bill amount 18000 but payment made in 2 days 10000 and next day 8000.

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On 05 February 2021 at 02:31 Report
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This discussion clarifies Section 40A(3) of the Income Tax Act regarding cash transaction limits. If a single bill or expenditure exceeds £10,000 in cash on one day, it will be disallowed. However, if a payment for a single bill is split over two days, with each payment being £10,000 or less, the expenditure is generally allowed and not subject to disallowance.

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Chartered Accountant
16188 Points Posted on 05 February 2021
If payment in cash exceeds 10000 rupees in cash in a single day then such extra amount will be disallowed
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On 05 February 2021 at 06:40
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54 Points Posted on 05 February 2021
Monirul sk ji section 40a(3) state that if you are incurred an expenditure of more than 10000 in cash for single bill / day / person then only your expenditure is disallowed as a whole. but if you make payment of single bill in excess of 10000 different days less than 10000 then it 's not disallowed
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On 05 February 2021 at 10:48
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Chartered Accountant
577 Points Posted on 18 February 2021

if paid in two days as mentioned in your query then this expenditure in cash is allowed

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On 18 February 2021 at 14:16

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