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Payment more than 20000

04 June 2013

If a car is repaired and Rs.25000/- paid in cash then what is the remedy of the same as cheque can not be issued to the person to mechanic.......

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14 Replies

CA Himanshu Bansal (Risk Manager) (2345 Points)
Replied 04 June 2013

No remedy , any revenue expenditure crossing the limit of Rs. 20000 shall be disallowed.

You can do one thing, pay less than 20,000 on one day and remaining on any other day.( ie, rectify the entry in the books)

2 Like

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Yogesh Bhandari (CA FINAL Student) (429 Points)
Replied 04 June 2013

No remedy, whole expenditure of Rs. 25000/- will be disallowed.

shiv shankar rawat student CMA (Manager) (263 Points)
Replied 04 June 2013

Miss Paral Saxena

Mr. Himanshu and Mr. Bansal both are right ,

U/S 40 A(3) of income tax act exp will be disallowed above then of Rs. 20000/-,

Ganeshbabu K (Audit and Tax Advisory) (48564 Points)
Replied 04 June 2013

Entire amount disallwoed

if you want to make it as allowed just alter it to two vouchers and paid to two different persons

or split it to two dates so that no place it exceeds 20000

Rohit Aggarwal (ACA Bcom (H) MBA MCom) (470 Points)
Replied 05 June 2013

Giving respect to the right answers already given above, I just want to add that if he (the mechanic) is operating at low level, then either he would be issuing no invoice or on request of yours he can issue part invoices. In both of the cases (if any applies on you) you can claim the deduction.

Thanks.

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CA Parul Saxena (CA) (8500 Points)
Replied 05 June 2013

This is my point if the mechanic is operating at low level then he would not issue any invoice then if the expenditure is more than 20000/- can the co.claim deduction?

shiv shankar rawat student CMA (Manager) (263 Points)
Replied 05 June 2013

Miss Parul

1- Please understand without invoice how u rembresh the such exp

2- This is a revenue expenditure

3-Such exp is incurred for car repairing charges, which are related to CO. not personal

4- Maximum limit u/s 40A (3) is rs. 20000 (per day)

PRAVEEN KUMAR (MBA (Finance) B.Com.(P)) (3443 Points)
Replied 05 June 2013

It looks so unpracticle but we have to admit as per Income Tax, this will be Dissallowed

:-) no remedy as yet. other than manuplation of entries etc.

regards

Rohit Aggarwal (ACA Bcom (H) MBA MCom) (470 Points)
Replied 05 June 2013

Theoritically, Mr. SS Rawat is absolutely correct but practically, if the mechanic is operating at low level and issues no invoice, then the expenditure of repairs and maintenance can be claimed in two installments so as to allow the whole amount as Revenue Expenditure.

PS: ITO generally do not care about these petty expenses. Further he is not gonna inspect the mechanic for the expenses.

Thanks.

Suresh Raju (Manager) (21 Points)
Replied 06 November 2013

Dear ssrawat,

How to prepare salary slip. Monthly salary is Rs. 90000......and how to deducted tds on salary Rs.90000

Regards,

raju

ssrawat

Read more at: /forum/payment-more-than-20000-251554.asp#.UnobSlOIyYg

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shiv shankar rawat student CMA (Manager) (263 Points)
Replied 28 November 2013

Hi Friend

I m not getting your point.

Rgds

Shiv

Himanshu Singh (Student CA IPC / IPCC) (25 Points)
Replied 01 February 2015

Is the same case apply to co-operative socities? That if a cooperative society pays an amount of ₹25000. Then?

Mahdi kamal (Tax Consultant) (46 Points)
Replied 06 December 2016

please make it clear.. the invoice is for Rs. 25000/- . Now the we will make payment in two date.. say Rs. 15000 and Rs 10000. Ok. now my query is whether the invoice no. is same or two separate invoice..

CA Ashish Barthwal (Practising Chartered Accountant) (104 Points)
Replied 06 December 2016

As per income tax act provisions, an expenditure of more than Rs. 20000 paid to same person on same day is disallowed. So you have the option to change either day or person, otherwise disallowed.