11 October 2011
Hello experts.. My doubt is this concept of dis allowance of 20% of expenses... If cash payments exceed Rs.20000/- for a single person on a single day towards a single bill exceeds the limit 40 a (3) is applicable considering all exemptions under Rule 6DD is my understanding... Now where does this 20% comes into picture? Nothing like that is mentioned in my book (Manoharan sir's book). Kindly clarify.... Thanks a lot in advance...
11 October 2011
The 20 % disallowance was introduced in the section by the finance act,1995 with effect from 1/4/1996. The section has then amended and now 100% will be disallowed. W.e.f 1/10/2009, the limit has been enhanced to Rs.35,000/- in case of payment made for plying,hiring or leasing of goods carriages.
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