CASH PURCHASE OF GOODS OF INVOICE VALUE IS 150000 CAN I PAY CASH TO RESPECTIVE VENDOR IN A SINGLE DAY OF 150000
HE IS REGISTERED DEALER BUT NOT OPPEND CURRENT ACCOUNT
Despicable Knight
(16 Points)
Replied 04 October 2019
Kapadia Pravin
(17259 Points)
Replied 06 October 2019
Suresh Thiyagarajan
(Student)
(3986 Points)
Replied 10 October 2019
1. According to sec 40A(3), deduction will not be available if the payment made to a person in a day in cash exceeds Rs .10,000. However, the above amount of Rs. 10,000 will be substituted by Rs. 35,000 in case of payments made to plying, hiring or leasing of goods carriage.
2. Un your case, if you have made a payment of Rs.1,50,000 to one vendor in a single day through cash, then the same will be disallowed u/s 40A(3) at the time of computation of your Income-tax liability.
3. So, it is better to avoid such a payment.
Please correct me if the above solution has an alternative view.
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