TaxTMI 
TaxTMI 
Dear All Members , I have one querry regarding Section 40A (3) regarding disallowability of cash expenditure of exceeding Rs.20,000 /- at a time . I have one doubt that if A purchases goods worth Rs. 70,000 /- and paid Rs.15000/- at one time in a day but during 2009 -10 on few occassions he paid in cash but not exceeding Rs.20,000/- at a time but during whole day it is Rs.40,000 /- to the same person . Earlier the ceiling was Rs.20,000 /- on one occassion as per my memory .But whether it is now as Rs.20,000/- per day instead of one time ? Please clarify the same . Thanks to all BAL KRISHAN GARG
cash expenditure / expneses u/s 40A(3)
02 Jun 2010 
2 Replies 
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Cash payment limit under section 40A(3) now applies per day per recipient, affecting tax deductibility.
The Finance Act, 2008 amendment to section 40A(3), effective 1-4-2009, establishes that the cash-payment ceiling applies to each expenditure per day per recipient; multiple cash payments to the same person in one day are to be aggregated for the purpose of the section's disallowance. (AI Summary)
The Finance Act, 2008 amendment to section 40A(3), effective 1-4-2009, establishes that the cash-payment ceiling applies to each expenditure per day per recipient; multiple cash payments to the same person in one day are to be aggregated for the purpose of the section's disallowance. (AI Summary)