Expenses Disallowed under section 40A(3) and 40A(3A) of Income Tax Act 1961

1 comments Sunday, February 20, 2011

Section 40A(3) of Income Tax Act 1961 provides for disallowance of expenses 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 bank or account payee bank draft, exceeds Rs 20000 and Section 40A(3A) provides for the payment in excess of Rs 20000 in a day made otherwise than account payee cheque or account payee bank draft, for an allowance made in the assessment for any year on the basis of incurred liability, to be treated as income of the year in which such payment is made. These relevant and important provisons and exceptions to them are provided as follows
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