CASH PAYMENT 20000 +
This query is : Resolved
18 December 2010
dear sir,
I have two querries regarding limit of cash payment of 20000/- as per income tax as under :
(1) Can a partner buy in cash Laptop (of say 40000/-) for personal use ? If in his books of a/c, cash balance is not sufficient, then can we pass entry in firm's book of cash payment of 40000/- to partner ? And then in partner's books as receipt of 40000/-by cash ?
(2) If a partner buys a laptop (to be used for business purpose) of 40000/- by cash with cashmemo in firm's name, then can we capitalise this purchase in firm's books-though cash paid is more than 20000/- ? (firm's book has sufficient cash balance to absorb this cash purchase).
thanks in advance.
anckoora.
I have two querries regarding limit of cash payment of 20000/- as per income tax as under :
(1) Can a partner buy in cash Laptop (of say 40000/-) for personal use ? If in his books of a/c, cash balance is not sufficient, then can we pass entry in firm's book of cash payment of 40000/- to partner ? And then in partner's books as receipt of 40000/-by cash ?
(2) If a partner buys a laptop (to be used for business purpose) of 40000/- by cash with cashmemo in firm's name, then can we capitalise this purchase in firm's books-though cash paid is more than 20000/- ? (firm's book has sufficient cash balance to absorb this cash purchase).
thanks in advance.
anckoora.
18 December 2010
Dear One,
Sec 40aiii Applies to Cash Expenditure Exceeding 20000.
Laptop is Asset Not a Expenditure.
Therefore 40(a)(iii) Not Applies.
ans Also Book Entry is Possible.
Sec 40aiii Applies to Cash Expenditure Exceeding 20000.
Laptop is Asset Not a Expenditure.
Therefore 40(a)(iii) Not Applies.
ans Also Book Entry is Possible.
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18 December 2010
dear sir,
Then, if we pay in cash Rs.30000/- to our regular stationery supplier against his official bill and the same is booked in books of accounts by debiting to printing & stationery A/c - can we pay him in CASH ?
Then, if we pay in cash Rs.30000/- to our regular stationery supplier against his official bill and the same is booked in books of accounts by debiting to printing & stationery A/c - can we pay him in CASH ?
18 December 2010
this is expenses (printing & stationary)
exceeding 20000.
so sec 40(a)iii applies
exceeding 20000.
so sec 40(a)iii applies
18 December 2010
Ayushji.
I disagree with your both answar.
first regarding assets,depreciation will not be allowed if it is business assets.if partners purchased for personal use .then it will be treated as drawings.so no question of applying this section.
second regarding printing,the amount will be disallowed if payment more than 20000 is fora single bill. multiple bill payment over 20000 a day has no effect in this section.
I disagree with your both answar.
first regarding assets,depreciation will not be allowed if it is business assets.if partners purchased for personal use .then it will be treated as drawings.so no question of applying this section.
second regarding printing,the amount will be disallowed if payment more than 20000 is fora single bill. multiple bill payment over 20000 a day has no effect in this section.
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20 December 2010
I agree with Sanat Pyne
24 December 2010
If payment made against a stationery purchase bill more than RS. 20000 in a day, it is disallowed u/s 40 A (3) of the Income Tax Act.
Regarding Asset purchase, I support Mr. Sanat's view.
Regarding Asset purchase, I support Mr. Sanat's view.
24 December 2010
Sir,
please check
para 148.3
page 398.
regards,
please check
para 148.3
page 398.
regards,
28 December 2011
Dear Sanat Pyne Sir,
If Cash Payment Made Exceeding 20000 Expenses in a Day Then Its Disallowed.
Also Though Multiple Bill, But From Same Supplier in Single Day, Then Its Disallowed.
& Regarding Asset Purchase,
Pls Go Through Question Part I Being Asked,
Author is Asking For personal Expenses / Personal Use laptop, so Question of Depreciation does not arise.
I Answered For That Only.
Regards,
If Cash Payment Made Exceeding 20000 Expenses in a Day Then Its Disallowed.
Also Though Multiple Bill, But From Same Supplier in Single Day, Then Its Disallowed.
& Regarding Asset Purchase,
Pls Go Through Question Part I Being Asked,
Author is Asking For personal Expenses / Personal Use laptop, so Question of Depreciation does not arise.
I Answered For That Only.
Regards,
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