Is sec 40A(3) applicable to salaries????
15 Replies
FATEMA
(CHARTERED ACCOUNTANT)
(719 Points)
Replied 07 September 2010
Dear Riya,
Sec 40(A)3 is applicable to any expenditure in respect of which payment in excess of Rs 20,000 is made otherwise than by an account payee cheque or account payee draft...Hence it is also applicable to salaries.The salary paid by the employer in cash in excess of Rs 20,000 will disallowed.
Regards,
Fatema
CA.G.Muguntha Narayanan
(Internal Auditor at TVS Motors)
(2195 Points)
Replied 07 September 2010
Dear Riya,
The section applies to salaries also, coz its a business expenditure. However, there is an exception in Rule 6DD, which reads as follows,
where the payment is made by an assessee by way of salary to his employee after deducting the income-tax from salary in accordance with the provisions of section 192 of the Income-tax Act, 1961, and when such employee—
(A) is temporarily posted for a continuous period of fifteen days or more in a place other than his normal place of duty or on a ship; and
(B) does not maintain any account in any bank at such place or ship;
Sanjay Singh Rana
(CA)
(208 Points)
Replied 07 September 2010
| Originally posted by : CA.G.Muguntha Narayanan | ||
 |
Dear Riya, The section applies to salaries also, coz its a business expenditure. However, there is an exception in Rule 6DD, which reads as follows, where the payment is made by an assessee by way of salary to his employee after deducting the income-tax from salary in accordance with the provisions of section 192 of the Income-tax Act, 1961, and when such employee— (A) is temporarily posted for a continuous period of fifteen days or more in a place other than his normal place of duty or on a ship; and (B) does not maintain any account in any bank at such place or ship; |
 |
I Agree
s.vaidyanathan
(CA )
(119 Points)
Replied 07 September 2010
Dear Riya
I too agree with Muguntha Narayanan
S.V
Saurabh Toshniwal
(ca final)
(2363 Points)
Replied 07 September 2010
salary paid by an employer to an employee above rs.20000 in cash is disallowed
eg: an employer pays rs. 35000 to one of employee than it is disallowed but if he pays rs. 15000 to his 3 employees each than rs. 45000 (15000*3) is not disallowed
Parul Agarwal
(Qualified Chartered Accountant)
(52 Points)
Replied 07 September 2010
Yes Riya.. Section 40A(3) is applicable to salaries.
Mohit Arya
(Chartered Accountant)
(96 Points)
Replied 07 September 2010
Section 40A(3) is related to business expenditure. Any amount of salary paid by employer to his employee is business expenditure. Therefore, If Salary paid in Cash is in excess of Rs.20,000 is not allowed as deduction.
Anil Kumar Meena
(Assistant Manager)
(475 Points)
Replied 07 September 2010
Best answer by Mohit ...
Sunshine
(Helping All)
(10575 Points)
Replied 07 September 2010
yes its applicable to all items of p nd l a/c .....so its applicable on salaries.......
Siddharth
(s)
(87 Points)
Replied 07 September 2010
Is this section also applicable to capital Exp. ???
If i have purchased Vechicle in cash payment is dep. on it allowed or not as per 40A(3)????
CA ASHISH SHAH
(CHARTERED ACCOUNTANT)
(353 Points)
Replied 08 September 2010
Sec 40A(3) is clearly specifies that any expenditure in excess of Rs. 20,000/-, so the salary is and expenditure for an employer so the section also applicable to salary
Sunshine
(Helping All)
(10575 Points)
Replied 08 September 2010
| Originally posted by : sid | ||
|
|
Is this section also applicable to capital Exp. ??? If i have purchased Vechicle in cash payment is dep. on it allowed or not as per 40A(3)???? |
|
no its not applicable for capital exp......dep can be claimed even if cash payment for vehicle is more than 20000......
Gokul Viswanath Shenoy
(Company Secretary & Finance Manager)
(430 Points)
Replied 09 September 2010
yeah,it applies for salaries also..the salary given by the employer should not exceed RS20000/- in cash or otherwise than by A/c payee cheque or draft to an employee..or else it will b disallowed to the employer
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