Can we make cash payment to supplier more than 10000..?
and if yes what is the limit of cash payment to supplier..?
5 Replies
Shivam gupta
(student)
(263 Points)
Replied 17 September 2018
no, u/s 40 A(3) cash pmt exceeding 10000 in a day to a supplier in respect of a purchase shall be disallowed.
JITENDRA SINGHVI
(SELF EMPLYOED)
(211 Points)
Replied 17 September 2018
but that section exclusively says revenue expenditure..?
Ashwin Kumar
(1234 Points)
Replied 17 September 2018
40A(3) restricts transaction via cash to one person on a day to rupees 10000 and the excess paid above shall be disallowed. However the exception to the section is that you can pay upto rupees 35000 to a person who is in the business of plying and hiring contract carriages and you can pay even upto rupees 2 lacs to a cultivator to purchase vegeatables and other cultivations which is directly cultivated from his own land. Hence to escape disallowance better make payment through bank channels or any mode other than cash.
rama krishnan
(12239 Points)
Replied 17 September 2018
payments made to revenue expenditure only and even it's capital expenditure, those payments will be excluded from cost of the asset for computation of depreciation
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