Rule 6DD - Cases and circumstances in which a payment or aggregate of payments exceeding twenty thousand rupees may be made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft

Cash payment exceptions permit non-cheque transfers in prescribed cases without disallowance under section 40A for tax reporting.

Rule 6DD exempts from disallowance under section 40A(3)/(3A) cash payments exceeding the statutory threshold when made otherwise than by account payee cheque/draft or prescribed electronic modes, if they fall within enumerated categories: payments to specified banks and LIC, government-required legal tender payments, bank-mediated transfers (LCs, telegraphic/mail transfers, book adjustments, bank-payable bills, prescribed electronic clearing), liability adjustments, purchases from primary producers and cottage industries, village payments where no bank exists, specified employee terminal payments, salary to temporarily posted employees without local bank accounts, agent cash payments, and authorised dealers/money changer transactions.