Section 40A(3) of income tax act

[Raj Malik]

Kindly suggest whether following exp will be disallowed or not u/s 40A(3)

1. Single transaction(Single voucher) is made in excess of ₹ 20,000 in which payment is made to different persons for diff exp.

2. Single voucher is made for the exp. incurred during whole month is more than ₹ 20000 for same party.

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AI Summary

Clarification Sought on Disallowance of Expenses Under Section 40A(3) for Transactions Exceeding 20,000 in Specific Scenarios A query was raised regarding Section 40A(3) of the Income Tax Act, asking if expenses would be disallowed under this section in two scenarios: first, when a single transaction exceeding 20,000 involves payments to different persons for different expenses; second, when a single voucher for expenses incurred over a month exceeds 20,000 for the same party. The discussion seeks clarity on whether such payments would be disallowed under the specified section of the tax law.