Examination fee paid by college in excess of Rs - 10000 through account of another person

[SUBAIR MADAKKAL]

Is examination fee paid by a college through an office staff of the college attracts 40A ? Please answer. This amount can only be paid through SBI Account.

AI Summary

Payments over Rs 10,000 via another person's account risk disallowance under Section 40A(3); use direct bank transfers A college payment of examination fees exceeding Rs 10,000 routed through a staff member's bank account risks disallowance under the tax provision that disallows payments above the cash limit unless made by account-payee cheque, bank transfer, or other prescribed non-cash modes. Routing funds through another person's account may be treated as non-compliant and could be disallowed unless clear documentary evidence shows the amount was immediately and verifiably paid to the rightful payee and the assessing officer accepts the genuineness. Best practice is direct payment by the college via account-payee cheque or electronic transfer to the actual payee.