Sec40a(3) cash payments exceeds 20000

[chandrashekhar bathini]

Dear sir,

salary payment to employee in cash(working at site) 50000 in a day, is it allowable or not allowable u/s 40a(3)

2) Amount 25000 paid to employee and the employee paying (wages to one person 10000,another person 15000)

in this way shall i pay advance to employee more than 20000

[DR.MARIAPPAN GOVINDARAJAN]

Any payment exceeding ₹ 20000/- paid by cash is not allowed under the Income tax Act provisions.

[chandrashekhar bathini]

Thank you sir.

AI Summary

Cash payment limit under Section 40A(3): cash payments above the statutory threshold are disallowable for tax purposes.
Payments made in cash by an assessee that exceed the prescribed monetary limit are not deductible under the provision dealing with disallowance of certain cash payments; this rule applies to salary or wage disbursements made at a worksite and to advances routed through an employee who in turn pays third party wages.