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PAYMENT EXCEED 20000 IN CASH

abhishek (Internal Auditor) (181 Points)

18 February 2010

hi.....

can we make payment cash exceed 20000/- for purchase of capital goods. & can we pay freight cash above Rs. 20000/- for payment of freight regarding to capital goods please suggest....

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4 Replies

Ameet (L) (1678 Points)
Replied 18 February 2010

For, Disallowance u/s. 40A(3) Payment exceeding Rs. 20,000/- require to satisfy following things,

1)Assessee incurred any expenditure

2)Payment exceed Rs. 20000/-

3)Payment made otherwise than by an account payee cheque or by a crossed dd.

Provision 40A(3) does not apply to expenditure which is not to be claimed u/s. 30 to 37.

Since in u'r case, u r making payment is not expenditure under the provision of Disallowance u/s. 40A(3), there is no question of disallowance.

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abhishek (Internal Auditor) (181 Points)
Replied 18 February 2010

i think these provisions are applicable in case of revenue expenditure not in regards to capital expenditure please suggest...

CA AYUSH AGRAWAL (Kolkata-Pune-Mumbai) (26986 Points)
Replied 18 February 2010

Originally posted by : abhishek
	hi..... can we make payment cash exceed 20000/- for purchase of capital goods. & can we pay freight cash above Rs. 20000/- for payment of freight regarding to capital goods please suggest....