• Oct
  • 14
  • 2008

Rule 6D – Payment of More Than Rs 20,000/- in Cash

Article ID 199 | Posted In Income Tax | , | 155 Comments » Print Friendly and PDF

Income Tax – Payment of More Than Rs 20,000/- (Amendment In Rule 6D)

Cash payment of more then twenty thousand in a day to Single person

Rule 6D Of The Income Tax Rules Rule Deals With, Cases and circumstances in which a payment or aggregate of payments exceeding twenty thousand rupees may be made by a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft.

RULE BEFORE AMENDMENT

The main part of the Rule earlier read as,No disallowance under clause (a) of sub-section (3) of section 40A shall be made and no payment shall be deemed to be the profits and gains of business or profession under clause (b) of sub-section (3) of section 40A where any payment in a sum exceeding twenty thousand rupees is made otherwise than by an account payee cheque drawn on a bank or account payee bank draft in the cases and circumstances specified hereunder, namely :-

RULE AFTER AMENDMENT

Now the amended Rule reads as, No disallowance under sub-section (3) of section 40A shall be made and no payment shall be deemed to be the profits and gains of business or profession under sub-section ( 3A ) of section 40A where a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees in the cases and circumstances specified hereunder, namely:-

In the 2008 Finance Act, Section 40 A has been amended as follows:-

Amendment of section 40A

In section 40A of the Income-tax Act, for sub-section (3), the following subsections shall be substituted with effect from the 1st day of April, 2009, namely:-

“(3) Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be Allowed in respect of such expenditure.

(3A) Where an allowance has been made in the assessment for any year in respect of any liability incurred by the assessee for any expenditure and subsequently during any previous year hereinafter referred to as subsequent year) the assessee makes payment in respect thereof, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, the payment so made shall be deemed to be the profits and gains of business or profession and accordingly chargeable to income-tax as income of the subsequent year if the payment or aggregate of payments made to a person in a day, exceeds twenty thousand rupees:

Provided that no disallowance shall be made and no payment shall be deemed to be the profits and gains of business or profession under sub-section (3) and this subsection where a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, in such cases and under such circumstances as may be prescribed, having regard to the nature and extent of banking facilities available, considerations of business expediency and other relevant factors.”

The Government explained this amendment as follows:-

Amendment to the provisions of section 40A (3) of the Income-tax Act, Section 40A (3)(a) of the Income-tax Act, 1961 provides that any expenditure incurred in respect of which payment is made in a sum exceeding Rs.20,000 /- otherwise than by an account payee cheque drawn on a bank or by an account payee bank draft, shall not be allowed as a deduction. Section 40A (3)(b) also provides for deeming a payment as profits and gains of business or profession if the expenditure is incurred in a particular year but the payment is made in any subsequent year in a sum exceeding Rs. 20,000/- otherwise than by an account payee cheque or by an account payee bank draft. However, the provisions of this section are subject to exceptions as provided in Rule 6DD of the Income-tax Rules, 1962.

Section 40A (3) is an anti tax-evasion measure. By requiring payments to be made by an account payee instrument, it is possible to verify the genuineness of the transaction thereby mitigating the risk of evasion. It has come to notice that the provisions of section 40A (3) are being circumvented by splitting a particular high value payment to a person into several cash payments, each below Rs. 20,000/-. This splitting is also resorted to for payments made in the course of a single day. Courts have also held that the statutory limit in section 40A (3) applies to payment made to a party at one time and not to the aggregate of the payments made to a party in the course of the day as recorded in the cash book. According to the judicial opinion, the words used are `in a sum’, i.e., single sum.

Therefore, irrespective of any number of transactions, where the amount does not exceed the prescribed amount in each transaction, the rigours of section 40A (3) will not apply.

To overcome the splitting of payments to the same person made during a day as referred above and to increase the efficacy of the provision, the amendment seeks to substitute the present provision to provide that where a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, the disallowance of such expenditure shall be made under the proposed sub-section (3) of section 40A or the payment shall be deemed to be the profits and gains of business or profession under the proposed sub-section (3A) of section 40A , as the case may be.

To illustrate with an example, let us assume a taxpayer has incurred an expenditure of Rs 40,000/-. The taxpayer makes separate payments of Rs 15,000/-, Rs 16,000/- and Rs 9,000/- all by cash, to the person concerned in a single day. The aggregate amount of payment made to a person in a day, in this case, is Rs 40,000/-. Since, the aggregate payment by cash exceeds Rs 20,000/-, Rs. 40,000/- will not be allowed as a deduction in computing the total income of the taxpayer in accordance with the proposed amendment.

The proviso to the proposed sub-section (3A) provides that in certain prescribed cases and circumstances the provisions of proposed sub-sections (3) and (3A) shall not apply.

This amendment will take effect from 1st April, 2009 and will accordingly apply in relation to assessment year 2009-10 and subsequent assessment years.

Accordingly Rule 6DD is amended accordingly.CBDT Notification No. 97/2008 [F.NO. 142/10/2008- TPL], Dated: October 10, 2008


  • GAURAV GOGIA

    Hi friends, i paid Rs. 100000/- for foreign flight ticket in cash and foreign tour is for business purpose. such expenses is more than Rs 20000/- in cash. whether Provision of section 40A(3) shall apply to company? or expenditure will allow to company

    • JAI

      It might be allowed if you have documents (invoice,ticket mentioning amount,date etc) supporting your cash payment but you need to prove that your journey was completely for “business purpose” and “not personal”.

  • bharathi

    75000 cash purchase single day

    • bharathi

      how much cash purchase per day

  • NR JAGANATHAN

    I propose to sell my house property. The registered value is xxx. The sale consideration is more than the registered value. I propose to deposit the capital gain(LTCG) amount(difference between registered value and registered value) and excess amount(difference between sale consideration and registered value)received by way of DD in LTCG account. I hope this is nota violation of the IT Act. Incidentally I would be entering into a Sale Agreement for the full value.

  • Ajay

    Does Sec 40A(3a) apply to a case where in cash payment is made in excess of Rs 20,000 against the same expense in a day but to different persons (Individual persons payment does not exceed Rs 20,000)

  • Rajat4

    have a expense bill of Rs500000/- and made payment of amounts less than 20000/- in various days(single day amounts not exceeding 20000/-). Is it applicable for disallowance u/Sec 40(A)(3)

  • Surendra Choudhary

    If a company give advance to his employee Rs. 30,000/- in cash at a time and the employee paid by cash various bill (expenditure)behalf of company, but not more than 20000 of a particular bill….
    is it allowed or disallowed ……

  • Kali Dass

    If a person want to purchase land in 10 lacs and the land owner demand only cash then what shall be the solution?

  • DESHRAJ

    Dear all,

    if i have a expenses of 40,000/- and i will pay this amount by my debit or credit card bcse company give expenses amt in my personal account, will be count in cash transection ?, what entry i entered in accounts please suggest me

  • LOKESH SHARMA

    sir i need daily update about taxation (including sale tax) as per our requirement plz. povide to me

    Regads

    LOKESH SHARMA

  • Sajid Zaveri

    Payment to Transporter more than 250000 in the year by cash. This payment is disallowed U/s. 40A(3)?

  • harshit darji

    i am owner of the company.dear all experts if i paid 30000 salary with 3000 hra to my employee then is it allowable expenses?

  • vivek

    dear sir,

    how many cash rupees take from my dealer at a onnce time?

  • Ronak gala

    Suppose to a finance company we pay the amount 22125 i.e more than 20000 because the Cheque was bounced so as per their policy they took cash as EMI. But this fact is not covered under the Rule 6DD but it is genuine case and thre was no intention as to evasion which is the core purpose of this section 40A. Kindly give the Solution

  • Dhruv Pandey

    Dear Sir,
    if we pay to above 20000.00 in a day same party, what will we face problam please tell me.

    i want to know

  • Anand

    We need to pay Rs.500000/- to our sub-contractor in Cash. If we are paid what is the solution in Books of Accounts.

  • F PJAIN

    It is elegible in retail business if payment made to different suppliers A,B,C and so on total payment made more then Rs 20,000/- for single day purchase by cash pl note that we are not paying cash 20,000/- to a single party for one day purchase even for multiple bills of single party

  • Vijat

    sir whether we can make payment for material required for the construction of building in excess of rs.20000

    • The khan

      Yes payment in cash for capital asset is allowable.

  • Akanksha

    If we rent a flat to a non-Indian tenant for Rs 45000 with a court agreement and he pays in cash to the two Owners of the flat. The owners split the cash in half i.e. Rs 22500 each and deposit the amount in their bank. What are the rules that will apply here ? How IT department will tackle this case and what should we do ? The tenant does not have a bank account in India and hence insists to pay in cash. What is the way to correct it ?

  • ravindra

    Advance to employee more than Rs.20,000/-. Allowable or Dis-allowable expenditure for ltd co.

  • Pradeep

    Please tell me sir if i have given a bearer cheque less than 20000 more than one in different days but party present all cheque same day at bank payment allowed or disallowed

  • Deepak

    I have pvt ltd company, doing business of real estate .under some circumstances I have made payments of more than 20000/- in a single day to a single purchaser for buying a land, so I wanna know ,Wether this amount will treated to my income or not

  • kamal Patidar

    Dear Sir,

    we have Made Cash Payment above 20000/-for RTO Office My Loading Vehical Life time Registration Charges.

    Please Give Me Advice I Can Make Payment above 20000/-

  • Rajesh Kumar

    Where an amount exceeding Rs. 20,000/- is tfd. from a debtor account to a creditor account on their request, provisions of Sec. 40A(3) attracted ?

  • dipesh

    hello sir
    i have doubt about this section
    if an assessee has incur rupee 1,10,000 in cash for his personal expenses like paid bill of his own house construction is it also disallowed?

  • SHRI

    sec 40A(3), is this sec applicable to the payment of electricity bil ,above RS.20000. ?

  • Sudhansu

    Need the daily updates on taxation .

  • Balvant Avsare

    Dear Sir,

    How much maximum amount I can deposit with any Public Sector bank at a time towards payment of any type of Central Government Tax or State Government Tax? Is there any limit for this? I was told that certain taxes are paid by way of e-payment. Which are these taxes?

  • Hanif

    Can partner made deposit or withdraw in partnership firm more than Rs. 20000/-?
    Is there any limit for partner?

  • chetan goel

    i like to know can we purchase assets more than 20000 in cash

  • hitesh

    Respected sir
    i am a automobile dealer and i am purchased my trading goods from various dealer and various station but when the bill amount are more then 20000/- can i pay this tading goods amount in cash. sir i have face many problem due to more dealer not accept cheque of my firm they only want cash against the bill. so please requred to guide me can i purchased trading goods more then 20000/- in against of cash bill. please sir help me

  • balotra urbancoop bank ltd

    should bank pay bearer third party cheque more than 20000/

  • Dhiraj

    yes u can provide more than 20000 for imprest fund

  • dilip

    whether it is applicable to fixed assets or not???

  • Sanjana

    I have made the voucher below rs. 20000/- for diff. days. In a year i have paid the sum of Rs. 100000/- by cash for income tax purpose what effect should go for pvt. ltd. co. return filling purpose . Pl. Note that this is deposit amt. we have paid .

    Actually our co. take a rental basis factory but the factory is not good condition so that exp. incurred on behalf of that owner paid by us . so that exp. we have recovered as a deposit from him

  • MA Gafoor

    i want to know that any rules in IT is that the company proprietorship can pay the salary to our employee in cash > 30,000/- if yes so which rules u/s and how much cash can pay in a month please advice me
    Thank.

  • pinki

    help
    for example :- a one person by bike 50,000 and he pay in advance to 19,000.please tell me how many days he pay his balance payment amd what his interest,plz tell me how calculate and what a formula.

  • manish

    Sir ,

    Can i paid more than Rs.20000/- in cash to 1 fuel station for fuel filling in my many vehicles?

  • ujjwal goyal

    if there is a concern who has a dealership of a motor bike company ….
    they receives an advance of rs 21000 from a customer in cash nd book a bike but after 2-3 days the costumer comes back and tell them that he is not able to purchase bike and take refund of 21000 in cash…

    is this cash payment made by such concern of rs 21000 in cash for return of advance money is disallowed or not????
    please answer
    ujjwalgoyal15@gmail.com

  • Anil

    If payment of Rs.50000 is made in cash, will be legally enfoceable debt?

  • Arun

    I want to pay 60k cash to one party , can i pay 20k one day 20k second day, and rest third day.
    what is the cash payment limit for the year for one party/ or individual

  • sharad marathe

    Dear Sir

    please help for one person Cash on Salary maximum limt which?

    Thanks & Regards,

    Sharad Marathe

  • sharad marathe

    Dear Sir,

    Empoloyee one Person Salary in Cash maximum limit which Rs.?

  • NV satyanarayana

    What is the maximum limit of cash that can be paid towards purchase of agricultural land to a single person in a day ?

  • Fanindra Sahoo

    How much we can pay in cash in one day to party?

  • Kalyan

    Sir,

    My company paid Rs.300000/- towards cost of Iron towards cost of constructing another branch in cash. Whether it attracts 40A(3)section?

  • NIKHIL

    WHAT TREATMENT HAPPEN IN CASE PAYMENT EXCED 20000

  • V J Raghunandan

    I have a question regarding cash payments of above Rs.20,000/-. I understand that this limit of Rs.20,000/- is not applicable if I want to avail of a loan on my deposits with any Bank – that is, if I am availing a loan on deposit, I can take the loan in cash even if it is beyond Rs.20,000/-. Is my understanding right? (2) This limit of Rs.20,000/- also does not apply to payment of interest. If I have a deposit of say, Rs.5.00 Lakh with a Nationalised Bank and presuming the ROI to be at say, 10.00% p.a. and if the interest pay-out is half-yearly, then, I can insist that the Bank makes the interest payment in cash every half-year even if the same is above Rs.20,000/-. Is it correct? I request any of the enlightened readers to educate me on these points.

  • BALRAJ VERMA

    Sale of Plant and machinery as scrap can accept Rs 200000 or more cash in that case also 40A(3) applied or not?

  • Rajesh

    My question is that we sell products .Although the sale is below RS 20000/-.They insist on cash memo without any name that is Cash Sale. I would like to know what is the maximum  limit of cash sale in a year as per Norms.

  • rajesh talankar

    if i sell my house, & party pays in cash, how much amount can be deposited in cash in savings account in a day ?

  • Sandip Kumar Dalal

    It is understood that nobody can pay in excess of Rs.20,000/- to a party on a single date in cash as per rule 6DD.
    But I want to get confirm what is the annual limit if a single voucher/paid on single date below Rs.20,000/-.

    I seek your kind advise

  • Dave

    Is cash payment exceed rs 20000 on single day to a single person for RTO work is allow?

  • venkatesh

    If i purchase of capital goods for more than rs.20000. What is the treatment as per income tax act 1967 section 40a3

  • Kuldeep Sharma

    Suppose A has purchase goods from B. C owes A some money. C on instructions from A makes payment by an Account Payees Cheque to B. Will such payment by hit by section 40(A)(3)

  • Manoj Kumar

    If i am going to holiday and booked a room in hotel , if my check out bill amt exceed 20,000/- . Is it compulsory to submit PAN copy there.

  • Jijo

    Sir, Paid 200000 one day for cash purchase for trading(not capital goods). is allowable?

  • Dr. Ibadatpreet

    i am a masters student in dentistry in amritsar. we are provided with the monthly pay of 20,000 rupees. the course duration is 3 years.however, the college authorities have provided me the pay of my all the three years in the current year. A tax of about 45,000 has been calculated by them. But is there any way to save it. is the income of 3 years taxable in 1 year. can’t we divide it in three years as I was supposed to get? Help?

  • http://nil sameer

    i m trader of agricuture product. can paid more then 20.000 cash of agricultrist?

  • SHIJU

    NO THAT IS GOOD

  • Pradeesh

    I have a expense bill of Rs500000/- and made payment of amounts less than 20000/- in various days(single day amounts not exceeding 20000/-). Is it applicable for disallowance u/Sec 40(A)(3)

  • ANAND

    WHETHER PAYMENT OF HONORARIUM TO DIRECTORS PAID IN CASH IN EXCESS OF RS.20000/-ATTRACTS THE RULE 6DD OF INCOME TAX ACT .

    • http://taxguru.in admin

      Yes it do attract.

  • amal

    as we know that we can’t pay more than 20000/- cash to a party in a single day, is there any barrier / rules regarding any received entry .

  • surya

    can i pay more than Rs.20000 in cash to my creditor who has no any bank account?

    Give reply soon

    Thanking you

  • smita

    can we deposit more than Rs. 20,000/- in our contractors saving account instead of paying in cash in a single day. doese this will be disallowed kindly guide in this matter.

  • smita purandare

    whether payment by cash to MGVCL and GEB will be disallowed ?

  • Eshani Shah

    If a trust has paid bonus to certain employees in cash in excess of 20000 in a day then is the expense disallowed?

  • chetan sehgal

    if a person get its expense reimbursed and the company has made the payment of more than 20000, but all the bills are bills are below 200000 the account head is (travelling expense)

  • Sarat C Das

    when buying an existing company shares is it legally permissible to buy the shares in cash? We have about 20 shareholders who are going to buy all the shares of a company with equity of about Rs.30.00 lacs. We would like to know if it is possible to buy the shares in cash payments.

  • rizwana

    can we bankers give cash payment for more than rs.20000/- to the party who has born the cheque if he is not having pan card(our account holder has given cash cheque in the name of xyz)

  • Parteek Jain

    cash payment of more than 20000 for shares purchase is allowed as per income tax act?

    • Girish khubchandani

      Purchase of shares is not expense but an investment so sec 40A(3) NOT APPLY.

  • micky

    is it eligible if payment made to different parties in excess of 20000

    • Girish

      Yes it is Allowed

  • sudheesh

    SIR
    I AM WORKING IN A PRIVATE COMPANY.HERE WE PAID AN AMOUNT IN EXCESS OF RS.20000/- RELATED TO FREIGHT FOR RAW MATERIAL .WHETHER IT ALLOWED AS DEDUCTION.ALSO WHAT IS THE LIMIT FOR PAYING THE AMOUNT AS PER NEW AMENDMENT

    • Girish khubchandani

      For freight exp lim is 35000

  • mohan kushwah

    Can a company pay Salary to its staff (Single Person) to exceeds the limit more than Rs.20000/-.

    • rinku

      yes sir ji, but company liability to deduct tds on employee total annual salary, which is been submitted in tds return.

      • Girish khubchandani

        Sec 194C can apply in ur case if d conditions of sec satifies.

  • nagappan ramanathan

    i will purchased for Rs.1,00,000/- single bill value if cash bill or invoice bill against cash allow on time single cash entry voucher

  • sheetal

    we had paid cash more than rs. 20000/- to payment to contractor we are applicable to deduction of tds

    • rinku

      yes, ur liabialty become of when u hav paid for than 5000, for commision u must deduct tds, for this u need tan no., tds deduct of various rate as per rule & regulation.

    • Girish khubchandani

      Sec 194C can apply in ur case if d conditions of d aforesaid sec comply.

  • shankar

    sir i having housemaid , i pay her 5000 / month , can i get tax exemption

    form salary paid to a house maid , in cash , which documents will require to submit

    tax exemption , thnks shankar 0 98 19 19 19 40

    • rinku

      it based on your hra, if your hra is 5000 per month. you can get tax rebait. you need to submit rent paid receipt. or you can claim on the time on itr filling

  • Arun Acharya

    Sir,

    If any Saving Bank account is closed by a bank at the request of client and the Balance in excess of Rs. 20,000/- is paid in cash

  • Amit kumar agrawal

    IF ADVANCE PAID TO A CONTRACTOR RS. 50000 FOR FURNITURE WORK OF OFFICE IN A SINGLE DAY THROUGH CASH. THIS WILL ALLOWED OR DISALLOWED .

  • DIPAK KIMAR JAIN

    sir,
    My question is if we are a Pvt.Ltd.company engaged in manufacturing of edible non taxable items. we sales the goods to differenet party and they give cash payment to us of the said bill.The amount may be in lakh also whether this transaction is allowed by I.T.law or not .if no please so the section reference no.

    thanks
    DIPAK JAIN
    09836525687

  • sukhminder

    Can a company pay Salary to its staff (Single Person) to exceeds the limit more than Rs.20000/-.

  • jhonpaul

    i have trading bussines in chennai and i sale the matrial in cash and as such i use to purchase the material in cash and if the amount goes more than rs.20000.00 pls give advise.

  • Goutam Roy

    Sir. form dated 01.07.2010 new ammendmemd that cash payment form 20000 to 30000 single payment can be paid form not deducted tds. but i want to know if payment 25000 cash for advane to sundry creditors or debtors or some loan for reveived or payemt . aallow?

  • Vishal Joshi

    40A(3) of IT Act 1961 – Applicable to employee reimbursements

    • yash gandhi

      YES , PROVIDED THE VOUCHER PREPARED BY EMPLOYEE EXCEEDING RS 20000

  • Bhoj P Singh

    What is the limit of cash payment as per Income tax

  • Raja Kumar

    Cash transfere from branch to branch is this up to 20000 is eligabile as per IT ACT

    Please clarify.

    • rinku

      ya it’s legally ok, u can transfer cash>20000 because it is not expensive it is cash transfer, branch can not paid in cash expense more than 20000

  • nikhil vayeda

    Applicability of Rule 6DD in case where bill is of Rs. 15000/- Rs.10000/-and Rs.18000/- in a day and payment made by cash Rs. 43000/- on same day i.e. 15/10/2007 and 15/10/2009

  • chetan

    Can a loan disbursing company disburse a loan of Rs 20000 in cash?

  • salome

    What about capital expenditure u haven’t replied to that yet!!

  • Nitin Gokarn

    Sir, If a Charitable regd Instn holds a charity show and has to pay the artiste a sum of Rs 50000 by cash will Rs 30000 be treated as profits and not allowed for deduction ? Is it possible to split this amount on different dates on the voucher but to same person ?

  • SARAVANAKUMAR

    PURCHASE OF RAW METERIALS IN PRODUCTION COMPANY. HOW TO LIMIT OF CASH PURCHASE

  • girish kamath

    If we purchase assets and paid more than 20000/- say for ex: 60000/- furniture purchase then payment made in lumsum by cash whether it allowable

  • gaurav

    should i pay bearer third party cheque more than 20000 cash.

  • Akhil

    If “advance” made to company staff, above Rs.20000/-. Whether it allowable u/s 40(A)(3) of IT Act.

  • UTTAM

    WHAT IS THE LIMIT OF CASH PAYMENT & RECIEPTS AGENST SALE & PURCHASE BILL’S

  • deepak sane

    No any payment made thru the agent of the payee exceeds rs.20000/- is not dis allowed

  • Aunali Moiyadi

    whether amount paid to employees as reimbursement of expenses incurred during official tour will get disallowed if exceeds Rs.20,000/-

  • Shakti Goyal

    Plz tell me , if payment made in cash to contractor more than Rs.20000/- in a day is alloweds as expense.
    and more than Rs.500000/- in ayear, in cash payment is allowed as expense.

  • Rekha

    If individual GR’s of a transporter are of 50000/- and payment made at a time Rs. 50000/-in a single day, will it apply?

  • viney

    THE PAYMENT AGAINST CAPITAL GOODS CAN BE MADE EXEEDED 20000 ?

    • yash gandhi

      IT IS ALLOWED AS PER SEC40A(3) OF I.T ACT .BECAUSE IT IS NOT AFFECT P&L A/C .

  • HARSH GOENKA

    a company is paid Rs. 65000/- to a contractor. But it showed that there are 4 bill, each less than Rs. 20000/-, of different dates. Will this payment is disallowed u/s 40A(3)?

    • yash gandhi

      NO DISALLOWANCE SHALL BE ATTRACTED U/S 40A(3) OF I.T. ACT. BECAUSE FOR THE APPLICABILITY OF THIS PROVISION EXPENDITURE AS WELL AS PAYMENT SHALL BE EXCEED RS 20000

  • salary advance paid to employee in execess of Rs.20000 is it allowed in income tax act

    salary advace paid to employee an amount of Rs.50000 is it allowed in income tax act

  • P.Srinivasa Rao

    More than Rs.2000 paid to customers in Construction & paddy brokerss & Ricc Millers. Is it correct or not?

    please reply te me

    P.Srinivasa Rao
    Tadepalligudem

  • Vicky

    purchase of stamp paper fo rs 500000 in cash. will this expenses dissallowed ?

    • ajay goyal

      any sum paid to govt. is allowed as per rule 6DD of r.t. acr.

  • http://mesingh366@gmail.com IF A COMPANY PAID EXCEED RS.20000/- FOR 13-14 DAYS WORKS THROUGH ONE ACOUNT PAYEE CHEQUE. IS IT DISALLOWED U/S 40(A) (I)

    IF A COMPANY PAID EXCEED RS.20000/- FOR 13-14 DAYS WORKS THROUGH ONE ACOUNT PAYEE CHEQUE. IS IT DISALLOWED U/S 40(A)(I)

  • Harpreet Singh

    If individual GR’s of a transporter are of less than 20000/- and payment made at different times exceeds 35000/- in a single day, will it apply?

    • http://www.taxguru.in Sandeep Kanoi

      Yes and Your expense will get disallowed.

    • Deepanshu goyal

      Sandeep bhai tum galat ho. It is allowed.

      • NEHAL

        hey 35000 in a day hai so i feel sandeep bhai theek hai

        • http://www.sandeepkanoi.com admin

          Thanks Nehal

  • Rajenn

    I have received payment against sale of product in cash more than Rs. 20000/- and at the time of settlement I need to pay tham more than rs. 20,000/- will it allawable

    • Deepanshu goyal

      It is disallowed.

  • sagar kr Rana

    Cash more than 20000 transfer to Branch/Site office is allowable Expenses U/S 40A(3)???

    • http://www.taxguru.in Sandeep Kanoi

      Cash transfer to branch is not expense.

    • yash gandhi

      YES , IT IS ALLOWABLE, BECAUSE TRANSFER DOES NOT AMOUNT TO EXPENSE.

  • D.Tirumala

    is sec 40A(3) apply for fixed assets either depriciable or not

    • CA Parmeshwar

      No. this section is applied only to the expenditures.

      • Girish

        Dep does not involves any cash outflow so sec not apply. HOWEVER IS AN EXPENSE

  • http://amitbajaadvocate.blogspot.com AMIT BAJAJ

    do the capital expenditure incurred in violation of section 40A(3) will be added to income. since no deduction of capital expenditure is taken from income can it be disallowed in such way to result in addition of income.

  • http://riaz.patel9@gmail.com i have paid cash for property tax or Rs-40000 is it disallowable

    i have paid cash for property tax of Rs-40000 is it disallowable

    • http://www.taxguru.in Sandeep Kanoi

      Payment to government can be maid in cash too and will be allowable.

      • yash gandhi

        AS PER RULE 6DD IT IS ALLOWED.

      • Deepanshu goyal

        Gandhi is right.

  • shipra

    what if bill nos.are different but payment is made on the same date to same person..all at different time during the day

    • http://www.taxguru.in Sandeep Kanoi

      You can pay more then 20000/- in a day to one person even if bills are of different dates.

  • Meenal

    What is the logic behind seting the limit to Rs. 20,000/- u/s 40a (iii)

    • yash gandhi

      TO PREVENT FRAUD

    • Girish khubchandani

      20000 lim ka logic to law makers hi bta sakte hai but sec ka logic hum bta sakte hai.

  • Uma V

    If an “advance” of Rs. 1,50,000 for court fee is paid in cash, does it result in violation of rule 6DD of the Income Tax Act,1961.

    • http://www.taxguru.in Sandeep Kanoi

      No

  • http://sthish_viswa@yahoo.co.in what about expenses paid to different people on the seame day. will that make section 40A(3) applicable?

    what about expenses paid to different people on the same day but the aggregate expenses increase 20000/- will section 40A(3)apply?

    • http://www.taxguru.in Sandeep Kanoi

      No Limit is 20000/- per person.

    • Girish khubchandani

      Sandeep is right.

  • http://icai.org GAURAV BHATIA

    If a company made advance payment to hos emloyee in cash for Rs.2 Lacs, Employee deposited this sum in his personal account and made payment for expenditure on behalf of company through account payee cheque from his personal account.

    Whether Provision of section 40A(3) shall apply to company? or expenditure will allow to co.?

    Please comment……..

    • yash gandhi

      NO DISALLOWED BECAUSE IT IS NOT AN EXPENSE

      • Girish khubchandani

        Here payment is made through a/c payee cheque so no disallowance. But it is an expense.

  • amit

    If any company make payment exceeding Rs.20000 to their employee as a tour advance in that case also 40A(3) applied or not?

    • Sandeep Kanoi

      Advance do not amount to expense. It depend how emplyeee prepare his voucher. He expense in a day should not exceed 20000 and to avoid litigation one voucher amount should also not exceed 20000/-

      • Girish khubchandani

        100% satisfy with MR Sandeep kanoi.