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payment above 20000

swohra (none) (537 Points)

12 December 2009

dear members

Can a person make a cash payment above 20000 to a transporter on the basis having 3 bilty for 3 type of goods received in a single vehicle? each bilty is below 20000.

Thanks in advance

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8 Replies

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 12 December 2009

The limit for cash payment made for plying, hiring or leasing goods carriages has been raised to Rs. 35,000/- w. e. f. 01.10.2009

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Rajan Pasrija (ACCOUNTANT) (53 Points)
Replied 12 December 2009

I am totally agree with Aditya

Cash Payment u/s 40A(3) & (3A) has been increased in the case of payments made for plying, hiring or leasing goods carriges from Rs. 20000 to Rs. 35000 - This will effective from 1st Oct. 2009

swohra (none) (537 Points)
Replied 12 December 2009

Its ok. Sir I want to know that whether he can pay the sum above limit by this way and can ignore cash limit above 35000/-.

Thanks in advance...

MITU.... (ARTICLE Assistant) (210 Points)
Replied 12 December 2009

no if he ignores the limit deduction in respect of payment will not be allowed as deduction

S K SINGH (CA FINAL) (42 Points)
Replied 12 December 2009

Hai Freinds,

Amounts not deductible in respect of expenditure exceeding Rs.20000/- (Rs.35000/- from 01-10-09)

Exception:- Rule 6DD

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CA. Megha Topiwala (Job) (1534 Points)
Replied 12 December 2009

Agreed with SK singh...

Kalpesh Chauhan, (Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com)) (8311 Points)
Replied 03 September 2010

Under the Finance (No.2) Bill, 2009, limit of cash payment, i.e., payment in ways other than by account payee cheque or draft to transport operators has been increased from Rs. 20,000/- to Rs. 35,000.00 w.e.f. 01.10.2009. This increase drawback is that truck owners/drivers have little working capital and they need cash to route expenses for diesel, fuel and repairs etc. which generally exceeds Rs. 20,000.00. But this kind of hardship is not limited to transport operators only. Ideally this ceilling should be increased across the board considering the fact that amount of Rs. 20,000 was fixed long time back in the year 1996 when it was increased from Rs. 10,0000 fixed in the year 1988, which in turn was increased from Rs. 2,500 at the time when the provision was first introduced in the year 1968.

Vicky (CA, LCS,MCOM,) (136 Points)
Replied 03 September 2010

dear swohra...........40A(3).......is attracted if the payment and expenditure both are greater than 20000/35000 (for transporters).....so it wont apply in ur case