Sec. 40a (3)

no expense would not be allowed even though its in advance

expense would be disallowed....

I think Expenses would be disallowed unless it falls within the Exceptions mentioned in Rule 6DD

The Exp will be disallowed if it is paid in any mode other than by A/c payee cheque or bank draft. However there are certain cases mentioned in Rule 6DD in which payment made by cash exceeding Rs 20000 can be claimed as deduction. Some of the cases mentioned in Rule 6DD are

i) When payment is required to be made on a day when banks are closed either due to public holiday or strike

ii) When Payment is made at a place which is not connected by banking channel

I hope it helps

Dear Anik,

If the payment is made towards expenses it is disallowed U/s.40A(3).

Initially advance made for expenses and subsequently it is adjusted with bill amount (i.e expenses) it is disallowed only.

Dear Anik

in your case no expenditure can be disallowed, as these type exps like peety expenses which are paid as cashiier or firm represenatatives

i think it depends on billing ???

suppose this advance is given against multiple bill(5000+14000+2000)=21000, allowed

In short,

this is disallowed only if single bill payment exceed 20000/-

expense above 20000 to single person on single day is disallowed so if we go as per ur example than disallowance would not be attracted

ya but i have read some where that k

it  totally depend s upon bills amount

i think

Billing aspects Comes only for Subsequent Payments. A Payment made against multiple Bills Where each Bill is below Rs.20000/- will not be covered u/s.40A(3). Advance Payment above Rs.20000/ towards cost and services attracts Section 40A(3)