Non-specified mode payments to banks and designated financial institutions are excluded from the tax cash-disallowance rule.

Payments made in a non-specified mode (cash, crossed cheque, bearer cheque, etc.) to the Reserve Bank of India or any banking company, State Bank of India or its subsidiaries, cooperative banks and land mortgage banks, Primary Agricultural Credit Societies and Primary Credit Societies, and the Life Insurance Corporation are not covered by the cash-expense disallowance provision.

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