Tanay (CA Final Student) (274 Points)
23 June 2009Hi,
Friends i am talking about cash payment above Rs.20000/-, As per different-different authores this sec. was amend some authors say cash payment above Rs.20000/- was disallowed and some said full payment was disallowed in respect of cash payment above Rs.20000/-.
CA Trinath Galla
(student)
(3130 Points)
Replied 23 June 2009
not above 20000
full amount of any payment above 20000 is disallowed
Anumanchipalli Sathikonda
(Tax Consultant)
(1559 Points)
Replied 23 June 2009
Mr. Tanay
What Mr.Trinath said is correct.
The amended section 40A(3) e.e.f. 1-4-2009 is as under:
"Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousan rupees, no deduction shall be allowed in respect of such expenditure."
Mr. Tanay, now you have come to know the implications of the provisions of section 40A(3).
With Best Wishes
Sathikonda
CA Devanshi Gandhi (Ajani)
(FCA DISA Mcom CIFRS & LLB)
(9058 Points)
Replied 23 June 2009
full amount is disallowed
Sanjeev Jain
(Chartered Accountant)
(922 Points)
Replied 23 June 2009
Right Full amount will not be claimed deduction.
silky jain
(chartered accountant)
(167 Points)
Replied 24 June 2009
full amount of expense would be disallowed
Jatin Singh Negi
(Country Analyst )
(505 Points)
Replied 24 June 2009
Full amount will be disallowed.
Amol Gopal Kabra (CA,CS,DISA)
(Practicing CA)
(8539 Points)
Replied 24 June 2009
if the cash payment exceeds Rs.20,000 (for the conditions mentioned under the sections and considering the exceptions under Rule 6DD) the whole amount will be disallowed and not merely in excess of Rs.20000/-
CA Abdul Halim Siddiqui
(Partner)
(481 Points)
Replied 24 June 2009
Hallo colleagues..
Cant we challenge this provision as unconstitutional as it put restriction in freedom of carrying business
Anumanchipalli Sathikonda
(Tax Consultant)
(1559 Points)
Replied 24 June 2009
Mr.Halim Siddiqui
In the case of Attar Singh Gurumukh Singh V. CIT [1991] 191 ITR 667 the court opined that disallownace of expenditure u/s 40A(3) does not amount to restriction on the fundamental right to carry on business.
Best Wishes
Sathikonda
CA. Rashi Goyal
(Chartered Accountant)
(512 Points)
Replied 24 June 2009
This is not a restriction on freedom to do business. You can pay in cash whatever amount you wish to pay, but the only thing is that you have to pay tax on that amount through of disallowability of expenses.
Sanjeev Jain
(Chartered Accountant)
(922 Points)
Replied 24 June 2009
Hie,
This provision can't be proved unconstitutonal because this provision restrict the mode of payment in cash so that govt can trace the payment to whom it is made. This provisoin is there just for controlling purpose nothing more or less than that. Moreover this provision is not prohibited to make payment for less than 20,000.
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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