Section 40a
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
25 May 2012
Can we make advance payment in cash, like 3lacs (Rs. 20,000/- per day)to the supplier for purchases to be made? pl. reply considering section 40A of Income Tax Act. i want to know whether anyone can make advance cash payment of Rs. 20,000/- per day, regularly for 15 days. i.e rs. 3lacs in 15 days for purchase to be made.
25 May 2012
No, payment can not be made in excess on Rs. 20000 per day. If it is made then disallowance will be made in the year in which expense is claimed.
25 May 2012
If per day amount less than rs. 20,000/- is paid would no disallowance would be called for but should be avoided as the same is very difficult to prove before the Income tax audthorities.
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