04 April 2008
Plz guide me on this topic. If Pvt. Ltd. Co. has made payment towards Rent of office premises Rs.4000/- p.m. the aggregate amount for the year Rs.48000/- will be disallowed under section 40A(3) of the Act. Payment made in inst. Rs.16000/- p.m. in 3 months
Such expenses will not be disallowed as section 40A(3) clearly states that a invoice will be only disallowed when the payment of one bill exceeds 20,000.
04 April 2008
UNDER SEC 40A(3),CASH PAYMENTS ON A SINGLE DAY FOR A SINGLE TRANSACTION IN EXCESS OF RS. 20000 WILL ONLY BE DISALLOWED. SUCH EXP. SHOULD ALSO BE CLAIMED UNDER SEC 30 TO 37 OF INCOME TAX ACT. FOR EXAMPLE IF A DONATION IN CASH IS NOT DISALLOWABLE(SINCE THIS IS NOT UNDER SEC 30 TO 37). R.V.RAO
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