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Enhancement of limit for disallowance of expenditure made in the case of transporters Under the existing provisions of the Income-tax Act, where an assessee incurs any expenditure, in respect of which payment in excess of Rs 20,000 is made otherwise than by an account payee cheque or account payee bank draft, such expenditure is not allowed as a deduction. Given the special circumstances of transport operators for incurring expenditure on long haul journeys, it is proposed to raise the limit of payment to such transport operators otherwise than by an account payee cheque or account payee bank draft to Rs 35,000/- from the existing limit of Rs 20,000/-. For this purpose a new proviso is proposed to be inserted after the proviso in sub-section (3A) of section 40A of the Income-tax Act. The existing limit for other categories of payments will remain at Rs 20,000/- subject to the exceptions declared in Rule 6DD of the Income-tax Rules. The proposed amendment will apply to transactions effected on or after the 1st October, 2009. [Clause 16]

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0 Comments

  1. rahul says:

    goods transport agency up Rs. 35,000 payment in a day is allowed, but my query is goods transport agency made payment RS.200000. in a day by cheques payment it is allowad or not please quikly replay me.

  2. R.N.MAHARWAL says:

    Payment against one bilty made in two days (Rs 35000.00 on each day) is allowed. The onus is on revenue to prove that such payments were made in a single day.

  3. satih rana says:

    dear sir,

    we make stock transfer from sonipat to patna,
    in two different trucks,,,trucks are different….
    but our branch is same…..(to whom we are trf the stock)
    expenses is related to receiving branch.
    but truck driver of both trucks ask for rs 20000/-advance for each truck.
    transporter is also same…..but truck numbers are differ.
    may we pay to driver rs 20000/- each on same day and dr the stock receiving branch….total to transporter in one day will be rs 40000/-(20+20) = branch dr is rs 40000/- in a day….kindly reply

  4. Harash says:

    If bill of transporter is Rs. 42500/- of dtd. 25.04.12, can we make paymnet Rs. 35000/- on 25.04.12 and rs 7500 on next day is it allowed?

  5. HEMANT says:

    FREIGHT PAYMENT(CASH) TO A PARTICULAR PARTY ON THE SAME DAY SHOULD NOT EXCEED 35000
    note: aggregate payment i.e if a party has made payment to ‘pall transport’ of 20000 on 7/1/11 and 25000 again to pall transport on the same day, then the whole 45000 will not be allowed as deduction

  6. girdhar says:

    I mean, Rs. 70000 bill raised of Transporter on 01.05.2010 and cash payment Rs. 35000 on 01.05.10 and Rs. 35000 on 02.05.10 intentionally.

    Is it allowed???

  7. Satyendra says:

    I mean, Rs. 70000 bill raised of Transporter on 01.05.2010 and cash payment Rs. 35000 on 01.05.10 and Rs. 35000 on 02.05.10 intentionally.

    Is it allowed???

  8. Satyendra says:

    one bill is more then 40000/-. Can pay same day cash 35000/- and balance payment on other days?
    this is exceptable or not?
    please reply.

  9. M.K. Ranka says:

    bill is more then 40000/-. Can pay same day 35000/- and balance payment on other days?
    this is exceptable or not?
    please reply.

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