Cash paymen above 20000 u/s 40a (3)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 June 2012 Mr X has made a payment of Rs100000 through Bank Draft by depositing cash in the Bank. He has credited the cash account in his books.It is reflected as cash payment in the books. In fact it is a payment by bank draft. What is the best method of presentation (making entries) in the situation so that section 40A (3) is not attracted.

Amol S Joglekar

Amol S Joglekar (Expert)
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08 June 2012 The presentation is correct. The said section is not hit. In case any body asks for, explain the situation.(Keep a xerox of DD application, DD etc)

shivaji prasad bhimavarapu

shivaji prasad bhimavarapu (Expert)
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08 June 2012 Payment in excess of Rs.20000/- in case of expenditure is to be made throgh A/c payee Cheque or A/c payee Draft.In your case I suggest you to keep the Counterfoils of DD.And also dont forget to debit the DD Commission in books of a/c.

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