section 40A(3)

[PRAKASH SINGH]

Employees are transferred from year to year from one place to another. As a company policy, employees are entitled to get reimbursement on expenditure towards transportation of house hold items as well as his/her conveyance(car).

issue is employees are making cash payment exceeding ₹ 10000/- per day to mover and packers(transporter) such as M/s Agarawal Packers & Movers. and claiming reimbursement from employer.

employer is reimbursing through net banking channel to employee.

Question here is whether dis-allowance as per Section 40A(3) will be applicable in the present case to the employer. this is reimbursement case. Section talks about any expenditure whether reimbursement is considered as any expenditure.

Regards

Prakash Singh

AI Summary

Section 40A(3) of Income Tax Act: Cash Payment Reimbursements by Employers Not Subject to Disallowance. An individual raised a query regarding the applicability of Section 40A(3) of the Income Tax Act, which disallows certain cash payments exceeding 10,000. The issue involves employees making cash payments to movers and packers for transportation expenses and seeking reimbursement from their employer. The employer reimburses these expenses via net banking. The question is whether such reimbursements fall under 'any expenditure' as per Section 40A(3) and if disallowance applies. A respondent opined that Section 40A(3) would not apply in this reimbursement scenario.