Cash payments exceeds 20000

This query is : Resolved

nandan (Querist)
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02 February 2014 Q1)My query is if we make a consolidated payments of diffrent bill of different date of a single party mr x which exceeds 20000 as under: 1.1.2014 bill no 01 10000 2.1.2014 bill no 02 8000 3.01.2014 bill no 03 9000 cash payments made on 4.1.2014 total 10000+8000+9000=27000
Plz answer it soon whether payments of 27000 thousand will be disallwed?
Q2) if above mentioned 3 bill (10000+8000+9000) belongs to same day i.e 3.4.2014 and payments made on 4.1.2014 total 27000 then what will be the answer ?

Uday Shetty

Uday Shetty (Expert)
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03 February 2014 In both the case if the payment is made to a single party the amount is dissallowable, bcz...in a single day to a single party payment of rs. 20000 or more is not allowable..even the payment is against different bills.

R.S..

R.S.. (Expert)
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03 February 2014 Allow me to disagree with Mr Shetty. For applicability of Sec 40A(3), both expense & payment should exceed Rs 20,000. In both the cases, each bill is separate expense which is below the limit of Rs 20,000. Hence if all bills are paid even on same day, expense will be allowed.

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