Kamal Sharma (Aspiring CA) (101 Points)
06 April 2012
Whether salary paid in cash through payrol in excess of Rs.20,000 is disallowed under section 40(A)3 of the Income Tax Act ?
CA Ankit Totla
(Practicing Chartered Accountant)
(469 Points)
Replied 06 April 2012
yes.. as per section 40A(3) "any expenditure incurred as a payment in sum of exceeding Rs.20000/- otherwise of paying with payee account cheque, demand draft or any transaction made by banks like RTGS, shall not be allowed as a deduction. However if payment is being made for hiring or leasing, the limit is 35000."
its clear that any expense would be disallowed if paid in cash over 20000
Mitesh
(Article)
(30 Points)
Replied 06 April 2012
Devendra
(Chartered Accountant)
(4775 Points)
Replied 06 April 2012
If such cash payment above Rs. 20000/- satisfies any of the conditions of Rule 6DD of the Income Tax Rules, 1962, then the salsry expense shall be allowed.
Regards,
Devendra Kulkarni
CA Rakesh Goenka
(CA & CS)
(872 Points)
Replied 06 April 2012
yes if it paid over Rs 20000 in a single day otherwise than account payee cheque then it vl be disallowed
CA PRAVEEN SINGH
(MANAGER ACCOUNTS)
(2277 Points)
Replied 07 April 2012
yes.. as per section 40A(3) "any expenditure incurred as a payment in sum of exceeding Rs.20000/- otherwise of paying with payee account cheque, demand draft or any transaction made by banks like RTGS, shall not be allowed as a deduction. However if payment is being made for hiring or leasing, the limit is 35000."
its clear that any expense would be disallowed if paid in cash over 20000
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