A tax payer has purchsed a asset for 40000 and paid the bill with cash on a single day. whether depeciation on it will be allowed since the asset is purchased for more than 20000 in cash.
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What if asset cost is more than 20000 and paid in cash
Replies (7)
yes, depr. will b allowed as capital asset is not an expense thus not covered u/s 40A(3)
yes, dep allowed
refer sec 40--A-3
No disallowance u/s 40A(3) is attracted if a capital asset is purchased by cash. Depreciation will be allowed.
Only expenses are hit by this disallowance.
yes you can
Yes, Depreciation will be allowed
Yes you can claim depreciation. Expenses incurred on cash are disallowed
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