09 November 2013
As per provisions of section 40A(3), payments above 20000 (35000 for transportation) will be disallowed if made by mode otherwise than A/c payee cheque or draft... However, as you said the payment has already been made, better write in narration that payment was made through DD... The Tax auditor will not disallow the expense and will simply make a qualification.... However, if in case it comes to scrutiny assessment the AO may ask for evidence and take confirmation from the department to whom EMD is paid...
09 November 2013
Mr. Sriram, her query was not related to income tax. Don't you know the scrutiny is done on the basis of internal rule and her case is far away from that..
09 November 2013
As in above case, the payment is done via cash, so I will advised you Smruti that send an email stating that you have made payment for that purpose to xyz person. This will be you kind of self receipt if something wrong happens..
CAclubindia
