sec 40A(3) IS APPLICABLE ON EXP. & ADVANCE IS NOT AN EXP. ACCORDING TO SEC. 40A(3) WE CANNOT MAKE PAYMENT OF MORE THAN 20000 IN CASH FOR SINGLE EXP. THROUGH SINGLE ENTRY HOWEVER LIMIT IN CASH OF FRIGHT IS RS. 35000
Cash Expense Limit
Page no : 2
Siddharth Maratha
(Senior Tax Consultant)
(23 Points)
Replied 19 November 2010
"Namaskar..Siddharth Maratha"
Yeah Guys Cash exps Limit is still Rs.20,000 only , yet its not Changed. Even if make Payment of Advance of Rs.50,000/- to emloyee & Loans to Others of bigger Amount u need to get thier consent in writting Dear"
Avinash Shrivastav
(Accountant)
(21 Points)
Replied 28 June 2013
Section 40A(3) of Income Tax Act 1961 provides that where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheques drawn or account payee bank draft exceeds Rs. 20,000/-, no deduction shall be allowed in respect of such expenditure.
However with effect from 01.09.2009, in the case of payments made for plying, hiring or leasing goods carriage, the amount shall not exceed Rs. 35,000/-.
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