Section 40A(3)
Manikanta Raju CA,CWA,(CS) (Industry) (4482 Points)
19 May 2009Manikanta Raju CA,CWA,(CS) (Industry) (4482 Points)
19 May 2009
Krishan
(Service)
(633 Points)
Replied 19 May 2009
No, I doesnt think there is any circular or notification.
But as per the language of the section it is clear that the expenditure as well payment must exceed Rs. 20000. In ur case expenditure is not exceeding Rs. 20000. so the provision will not apply.
CA Abdul Halim Siddiqui
(Partner)
(481 Points)
Replied 19 May 2009
IT IS NOT OPINION OR AUTHOR VIEW....IT'S PROPER INTERPRETATION OF THE PROVISIONS .
The payment for the above mentioned expenditure (or part thereof) Exceeds Rs.20000/-
IT IS FOR SINGLE EXPENDITURE & SINGLE PAYMENT
Manikanta Raju CA,CWA,(CS)
(Industry)
(4482 Points)
Replied 20 May 2009
Krishan
(Service)
(633 Points)
Replied 20 May 2009
Please update urself as not only 20% is to be disallowed, whole of the expenditure is disallowed. and crossed cheque are replaced by account payee cheques.
Sachin Jain CA, CS, CWA
(Job)
(240 Points)
Replied 20 May 2009
There is an amendmend in the finance act 2008, due to which the prior interpretation has been over ruled. Now a days, If a payment / payments of more than 20000/- Rs. has been made to a party agains various bills all of them individually are less than 20000/- in a single day even then the provisions of this section will apply & all bills during single day will be clubbed & the limit of 40A(3) will apply over the total bills during the day.
Please refer the Finance Act 2008 & the Momorandum explaining the same.....
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