Tax Executive
530 Points
Joined July 2012
U/s 40A(3)[Read with Rule 6DD] of Income Tax Act, payment otherwise than by an account payee cheque or an account payee bank draft in excess of Rs. 20000/- is disallowed. However it's not illegal. Thus, one may made cash payment by any amount but as per IT Act, such cash payment exceeding Rs. 20000/- will not be allowed as expenses.