Under Income Tax Act, more than rs.20,000 cash payments will be disallowed u/s 40A(3). Is it for revenue expenditure or capital expenditure also.
Can we pay cash payment more than 20,000/- in case of capital expenditure? For example Construction labour, Machiney purchase, Contractors for construction work etc.
For construction labour expenses, we are paying them on daily basis based on no. of workes count, and we are adding that expenditure to land / building cost as applicable. Please note that they are not our company employees and there is no any agreement between company and labor workers. Coming for work or not on a particular day depends on them only.
Here I am seeking your best advice and procedure in this quest.
CAclubindia
