Jagdish (Article) (123 Points)
03 June 2011Exp. paid in cash exceeding20,000/- are disallowanced.
If yes, i want to know that20,000/- at a time or aggregated amount in FY?
For example, assess incurred tea exp. of3500/- around and pays in cash every month.
To whom it is applicable? Audited assess or any other?
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 03 June 2011
20000 is the limit for a day. not for the year
CA NITUL MEHTA
(KPMG-Senior Consultant-International Tax )
(236 Points)
Replied 03 June 2011
and is applicalble for all who are computimg income under income from business and proffesion and it has no relation to audit
Jagdish
(Article)
(123 Points)
Replied 03 June 2011
Thanks sir
If assess pays, for the bill of Rs. 30000, in two installment of Rs. 21000 on one day and 9000 on another day, then 21000 paid will be disallowed?
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 03 June 2011
yes 21000 will be disallowed(except freight) . rather than you can pass entry of 20000
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 03 June 2011
in case of freight the limit is 35000
Dhanya
(nil)
(62 Points)
Replied 03 June 2011
section 40 A (3) read as “ 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 cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be Allowed in respect of such expenditure"
So the limit of Rs.20k is applicable to daily transaction and not aggregate amount paid in a FY as u asked.The intention of this section is to avoid making payment above Rs.20,000 to a single person on a single day otherwise than by A/C payee cheque.Provision is applicable to all assessees carrying on a business or profession.
CS,CA F,Numrologi TusharSampat
(CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert)
(85930 Points)
Replied 03 June 2011
| Originally posted by : future ca | ||
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in case of freight the limit is 35000 |
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Agreed.
nikhil
((CA Final) Article)
(363 Points)
Replied 03 June 2011
if we pay cash in a day to parties name A and B 19500 and 19700 then it will be allowed or disallowed ????
Dhanya
(nil)
(62 Points)
Replied 03 June 2011
since its below 20000 it will be allowed provided aggregate payment in a day to each of them doesn't exceed 20k
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 04 June 2011
| Originally posted by : nikhil | ||
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if we pay cash in a day to parties name A and B 19500 and 19700 then it will be allowed or disallowed ???? |
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SINCE A AND B R TWO DIFFERENT PARTIES . HENCE IT IS ALLOWABLE
CAclubindia
