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

Rule 6DD: Exceptions for Payments Over 10,000 Without Account Payee Cheque or Electronic Transfer Explained

Rule 6DD of the Income Tax Rules, 1962, outlines circumstances where payments exceeding ten thousand rupees can be made without using an account payee cheque, bank draft, or electronic clearing system. Exceptions include payments to banks, the government, and under certain banking arrangements. Payments can also be made for purchasing agricultural produce, cottage industry products, or in areas without banking services. Other exceptions include payments to employees for terminal benefits, salary under specific conditions, agents for cash transactions, and authorized dealers for foreign currency. These provisions ensure no disallowance under section 40A of the Income Tax Act.