09 August 2013
sir/ medam yadi Business mai expenses hai lekin wah sabhi cash mai hai 20000 se uper aur vah sab jainiuan expenens hai to bhi waha expeneses diallowe ho jaige kya please explain sir
09 August 2013
It depends upon the nature of business. . If you are showing income U/s 44AD, you may ignore this point. (Aap yadi 44AD me Return Bharte hen , Profit 8% on turnover, to-aap is chinta se mukti pa sakte hen) . In a tax audit case, the expenses incurred in cash are allowable only when they are covered under the exceptions given under Rule 6DD. (Rule 6dd me kuchh "apwad" diye hen, yadi expenses us prakar ke hote hen to Rahat mil sakti he) .
09 August 2013
Payment or aggregate of payments made in a single day for an expense in cash exceeding Rs. 20,000/- will be disallowed u/s 40A(3). The expense may be genuine but it will still be disallowed.
The provision is very clear. It was introduced to counter black money. Payment in cash results in generation of black money as the recipient will not disclose the same as income.
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