Sec 40 (A) (3)

602 views 7 replies

Deepak Agarwal

Chartered Accountant

117 Points Joined October 2010

Hey friends..!!

i am little bit confused in sec 40 A 3 regarding cash payment exceeding 20000 in a day otherwise than by way of a/c payee cheque or draft..!!

Some says this sec not apply if there is seperate invoices from 1 supplier or party to whom we make payment..!!

However the wording in the sec is "Aggregate in a day", so i think that is not important that whether there are seperate invoices or not..., and the sec must apply if the payment exceeds 200000...!!

Please guide proper interpretation..!!

Thanks...!!!!

Replies (7)

Sumit Grover

Chartered Accountant

3652 Points Joined September 2008

Mr. DEEPAK

plz read d section carefully,

it says in case of an expenditure incurred, in respect of which payment in escess of Rs. 20000 is made by way other than a/c payee bank dratf or cheque, den the exp. will not be allowed

so. in nutshell, it can be said that--- expenditure as well as payment must exceed Rs. 20000.

so, in case two diff invoices are made on same day, they will be considered as diff exp. only

plz correct me if m wrng

Mukesh Kumar Singh

CA-FINAL

4094 Points Joined January 2011

ya, sumit you are absolutely right..................

Sunshine

Helping All

10575 Points Joined March 2010

separate invoices amount to 2 different expenditures...even if u pay more than the specified limit of 20000 in a day to the same person via 2 or more different vouchers, it will be allowed provided each voucher is below the limit of 20000......

Anvesh Desai

Chartered Accountant

156 Points Joined September 2009

Originally posted by : sumit grover
	Mr. DEEPAK plz read d section carefully, it says in case of an expenditure incurred, in respect of which payment in escess of20000 is made by way other than a/c payee bank dratf or cheque, den the exp. will not be allowed so. in nutshell, it can be said that--- expenditure as well as payment must exceed20000. so, in case two diff invoices are made on same day, they will be considered as diff exp. only plz correct me if m wrng

yup absolutely

CA Hemlata Sharma

Chartered Accountant

29 Points Joined September 2009

Ya, Sunshine u r right. bt sec also states that if expenditure incurred exceeds Rs20000 bt payments are made by splitting the whole amount in small denomination than Rs20000 then also the expenditure shall not b allowed.

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Mr. DEEPAK

plz read d section carefully,

it says in case of an expenditure incurred, in respect of which payment in escess of Rs. 20000 is made by way other than a/c payee bank dratf or cheque, den the exp. will not be allowed

so. in nutshell, it can be said that--- expenditure as well as payment must exceed Rs. 20000.

so, in case two diff invoices are made on same day, they will be considered as diff exp. only

plz correct me if m wrng)

Ya sumit u r right.

CA MANIK KUMAR

Manager

710 Points Joined July 2010

yess expenditure as well ass paymenttt shoulddd be more than 20000... if u r paying payment of two expenditure of 10000 and 15000 to the same person than this is allowed