About section 40a(3)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 June 2014 if A makes payment to B Rs.17620 for cartage expenses & same day A makes payment to B Rs.19740 for any other expenses all are paid in cash.Hence total amount paid on that day is Rs. 37360. Is this expenses are disallowed under Sec. 40A(3) or not ?

CA Shashank Jain

CA Shashank Jain (Expert)
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24 June 2014 Sec 40A(3): Where the assesee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day exceeds Rs.20,000/- by cash is disallowed. Hence it will be disallowed as payment to that person exceeds Rs.20,000/-.

Rupesh Jain

Rupesh Jain (Expert)
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25 June 2014 under 40A(3) for if assesse pay exp. amount to single person exceed Rs. 20000/- then exp. will disallow. you can make unlimited transaction to many person in a day but amount of each transaction below Rs. 20000/-

if you payment made to transporter in a day this limit is Rs. 35000/- per day from Dt. 1.10.2009.

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Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2014 Sir, my question is Rs.17620 paid to transporter & Rs.16320/- paid as a other exp. to same person on same day is it disallowed exp. because transporter limit is Rs.35000/-.