nayan
asked over 3 years ago
If company or firm required to tax audit can make payment to PGVCL BILL IN CASH FOR MORE THE RS. 20000/- ??
acharya
answered almost 3 years ago
Regarding you query on cash payment to PGVCL I would like to convince that As per provision of Section 40A (3)(a) of the Income-tax Act, 1961any expenditure incurred in respect of which payment is made in a sum exceeding Rs.20,000 /- otherwise than by an account payee cheque drawn on a bank or by an account payee bank draft, shall not be allowed as a deduction from your income. So the net effect will be your income will be higher and you need to pay higher tax.
Prabhash
answered over 3 years ago
Hi Friend, Regarding you query on cash payment to PGVCL I would like to convince that As per provision of Section 40A (3)(a) of the Income-tax Act, 1961any expenditure incurred in respect of which payment is made in a sum exceeding Rs.20,000 /- otherwise than by an account payee cheque drawn on a bank or by an account payee bank draft, shall not be allowed as a deduction from your income. So the net effect will be your income will be higher and you need to pay higher tax. You may also note that provision of tax audit will not make any difference on the allowabilty and disallowability of the expense made in cash.
