whether online money transfer covered u/s 40 A(3)

I am not sure but i think online money transfer should be covered in this section as this is none other then making payment other than by cash and that also in particuler account.

Further i am also getting salary more then Rs 20000 which directly credit to my account and there is no disalowance.

Here are amendmend made in 2007:

Payments made by a credit card, a debit card and use of an electronic clearance system (ECS) through a bank account would now fall outside the scope of expenditure disallowance by the taxman even if the amount involved exceeded Rs 20,000.

Dear INDUDHAR,

It will not be disallowed.

Regards

Vijay Kumar

The intention of the law is that the payment should be through a crossed instrument so that the proceeds are paid in the account of a payee. On line transfer also ensures that the payment is made in the account of the payee itself and the basic objective of law is met this way. Hence, the online payment, in my opinion, is not disallowable u/s 40A(3).

Online payment is allowed as expense....  as it is not paid by cash (hard cash)... hence not covered by sec 40A (3)...

i think, since because of transfer is made thru bank it will not get disallowed...... but one doubt is that non crossed cheque is also transfer thru bank account.... is there any similarity in between these two....

It is now specifically allowed for this transaction. However, it is still not allowed for 269SS and 269T

its a allowable exp.

Thank you sunil Sir...