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Introducing the “In Favour Of” filter in Case Laws.
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of <h1>Amendment to Section 40A: No deduction for expenses over 20K paid without account payee cheque or draft. Exceptions apply.</h1> Section 40A of the Income-tax Act was amended by the Finance Act, 2007, effective April 1, 2008. The amendment specifies that if an assessee incurs any expenditure over twenty thousand rupees and makes payment other than by an account payee cheque or bank draft, no deduction will be allowed. Additionally, if a liability was allowed in a previous assessment year but paid in a subsequent year in a similar manner, it will be deemed as business income for that year if the payment exceeds twenty thousand rupees. Exceptions apply based on prescribed circumstances considering banking facilities and business expediency.
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