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Cash Expenditure u/s.40A(3)

Purushothama J (CA Student - Final) (71 Points)

18 September 2008

Hi All,

As per new amendment, cash payment above 20000 will disallow full expenditure.

Eg: Purchase Rs.150000.

Payment made by Account payee cheque Rs.125,000/- and Rs.25000/- by cash.

I think it is full disallowed from ASSESSMENT YEAR 2008-2009.

I am correct or wrong

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8 Replies

Rajendra Kumar Sankhla (Tax Consultant) (66 Points)
Replied 18 September 2008

Originally posted by :Purushothama J

Yes it is fully disallowed

But as per the intension of law maker only the portion of cash payment should which is in excess of 20,000 should only be disallowed

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CA Pawan Goswami (CA) (2928 Points)
Replied 18 September 2008

No, Full amount will not be disaalowed . Only, Rs.25,000 will be disallowed.

jay shah (article trainee) (30 Points)
Replied 18 September 2008

yes, u r right.

It is fully diallowed from AY year 2008-09(Amendment of 3CD form)

CA Gaurav Gupta (Practice) (307 Points)
Replied 18 September 2008

yes this exp is fully dis allowed9(25000) wef A.Y. 2008-09

but there is diff. in the calculation the of Rs 20000 for A.Y.2008-09 & 2009-10.

students appearing in MAY 2009 should know the diff.

Ravi Satpal (CA (Final) & CS (Executive) Student) (2430 Points)
Replied 18 September 2008

25000 will be disallowed

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DHARMENDER (PCC) (28 Points)
Replied 20 September 2008

Originally posted by :Ravi Satpal
"	25000 will be disallowed	"

HELLO, EVERY BODY,

UNDER SEC 40(A),3 MORE THEN 2000./- CASH PAYMENT WILL NOT BE DISALLOWABLE IF FOLLOWED RULE 6DD, OTHER WISE IT WILL BE DISALLOWBLE MORE THEN 20000/-(SO, ACC.TO YOUR QUE, IT WILL BE DISALLOWABLE ONLY 25000/-)

CA Ravish Trivedi (The Possibilities are Infinite...) (772 Points)
Replied 27 September 2008

Yes Rs 25,000 is disallowed but if the purchase were in part say in multiple of less then 20000 then Rs 25,000 shall be allowed and sec 40A(3) SHALL not be applicable.