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Income Tax

RICHA SHARMA (CA ) (202 Points)

24 September 2008

I have a qurery. Under Income tax any payment exceeding Rs. 20000 in cash is disallowed. Does the same applies to Capital Expenditure also. Like if a person purchases a laptop of Rs. 40000 in cash making one time payment then depreciation on it will be allowed or disallowed.

Thanks if any one can answer the same

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5 Replies

(Guest)

Hi!

Section 40A(3) is applicable in respect of any expenditure which is deductible under Income Tax Act while computing income from business or profession.

The the nature of expenditure referred by you is of capital nature, hence provision of section 40A(3) will not be applicable.

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arvind (article assistant) (82 Points)
Replied 25 September 2008

Wats d hell is dis? I think u haven't study ur Tax paper properly in PE2.

Stop stupidity

(Guest)

The disallowance is concerned with any payment. So, this will be disallowed and you can't claim depreciation.

mohan.bhakat @ gmail.com

(Guest)

Dear Sir The provision of Section 40A(3) of the Income Tax Act, 1961 is as under :

(3) 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 payeee cheque drawn on a bank or account payeee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure.