sec 40A (3)

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rgurucharan (Querist)
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21 February 2009 please clarify,

when i make an advance payment of Rs. 25000 towards, the travelling advance. whether the advance attracts, Sec40A(3). please clarify at the earliest.

with regards,

R. Gurucharan.

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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21 February 2009 If you are making an advance then Section 40A(3) is not attracted. However you should be careful when you pass a journal entry for expenses then 40A(3) problem will arise.

In case if expenditure exceeds 20000 after travel issue cheque for travel amount and get back the total cash of rs.25000 from the employee.

This will solve your 40A(3) problem.

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)
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21 February 2009 Very well answered with practical solution.

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CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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22 February 2009 Even advance payment of expenses are covered under sec.40(A)(3).
So, the above expenditure will be disallowed.

rgurucharan

rgurucharan (Querist)
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24 February 2009 Is Sec40A(3) is applicable for the Trust?
Because it is covered under Chapter IV D of the income tax Act 1961. But Trust is governed u/s 11 to 13 of the income tax Act 1961. please clarify at the earliest.

with regards,

R. Gurucharan.