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Section 40a(3) - disallowance

13 August 2012

Hi All,

Disallowance under Section 40A(3) of the Income Tax Act is for all payments made in excess of Rs 20,000/-. Can anyone tell me whether payment made to court for filing a suit, (The Court fee being in excess of Rs 20,000) is covered under the exceptions mentioned in Rule 6DD of the Income Tax Rules, 1962 ?

Regards & Thanks

Hrishikesh

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6 Replies

Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 13 August 2012

I have gone through Rule 6DD but it seems that payt. made to court for filling suit is not covered, hence the same is disallowed if contravene Sec 40A(3)

Visit the link https://law.incometaxindia.gov.in/dittaxmann/incometaxacts/2005itact/rules006dd.htm

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CA Ashish Pathak (Employed at Cipla Ltd.) (2779 Points)
Replied 13 August 2012

Clause (b) of the Rule 6DD says no disallowce u/s 40A(3) shall be made "where payment is made to the Government and, under the rules framed by it, such payment is required to be made in legal tender". So in my opinion this payment to court in excess of Rs20000 is allowable as per Rule6DD as payment to courts amounts to payment to Government.

Ashutosh Biswal (Asst.Manager Finance) (283 Points)
Replied 14 August 2012

Originally posted by : ASHISH PATHAK
	Clause (b) of the Rule 6DD says no disallowce u/s 40A(3) shall be made "where payment is made to the Government and, under the rules framed by it, such payment is required to be made in legal tender". So in my opinion this payment to court in excess of Rs20000 is allowable as per Rule6DD as payment to courts amounts to payment to Government.

Yes its right ..

Ganeshbabu K (Audit and Tax Advisory) (48564 Points)
Replied 14 August 2012

Originally posted by : Saurabh
	I have gone through Rule 6DD but it seems that payt. made to court for filling suit is not covered, hence the same is disallowed if contravene Sec 40A(3) Visit the link https://law.incometaxindia.gov.in/dittaxmann/incometaxacts/2005itact/rules006dd.htm

S B Mishra (Article Assistant) (40 Points)
Replied 14 August 2012

Originally posted by : ASHISH PATHAK
	Clause (b) of the Rule 6DD says no disallowce u/s 40A(3) shall be made "where payment is made to the Government and, under the rules framed by it, such payment is required to be made in legal tender". So in my opinion this payment to court in excess of Rs20000 is allowable as per Rule6DD as payment to courts amounts to payment to Government.

Yes I agree with you sir.