sec 40A(3), payment xcding 20000

This query is : Resolved 

16 July 2010 suppose there is an employee whose monthly salary is 50,000 rs.
he has been paid 35000 cash as advance which will be deducted from his next month's salary
whether this 35000 cash p'ment will be disallowed u/sec 40A(3)

16 July 2010 This is an advance and Not an Expenses.

however the same should have been paid by Cheque.

I can suggest that break the amount in 2/ 3 different dates.

16 July 2010 sir as it will not be d'llowed ,why p'ment through cheque is reqd. ???


16 July 2010 it is not allowed because this exp is allowable on later date hence it will not be allowed when u will recognise it as an exp

16 July 2010 this 35000 cash p'ment will be disallowed u/sec 40A(3) when it is adjusted








--------------------------
take an example
advance salary paid in March,2010 Rs. 80000 (in cash)
same adjusted with salary of April, 2010

Disallowed in P.Y. 2009-10 (A.Y. 2010-11): NIL
Disallowed in P.Y. 2010-11 (AY. 2011-12): Rs. 80000



17 July 2010 Advance is an asset and not an expenditure.But when you adjust the advance against salary, then it will be treated as an expenditure for which payment has been made in excess of Rs 20000.

siva208@yahoo.com

17 July 2010 that means if this advance of 35,000 will get adjusted in 5 months(7,000 in each month)it will not attract sec 40A(3) ???

17 July 2010 Yes Mr.sagar....


18 July 2010 hat means if this advance of 35,000 will get adjusted in 5 months(7,000 in each month)it will not attract sec 40A(3) ???

no, even it is adjusted on same day with different bill, No disallowance u/s 40A(3)

19 July 2010 thanx mr.manmohan,mr.gaurav gupta,mr.sivadas & srikant sir.....
i hope u'll all help me like this in future also......



You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join CCI Pro
CAclubindia's WhatsApp Groups Link


Similar Resolved Queries


loading


Unanswered Queries