CASES WHEN ITC IS NOT AVAILABLE UNDER GST
CASH PAYMENT IN EXCESS OF RS. 10,000/- U/S 40A(3) AND RULE 6DD
Article discusses the treatment of expenditures incurred by an assessee in excess of Rs. 10000/- in cash or bearer cheque under section 40A(3) of the Income Tax Act, 1961 The income tax department in its endeavor to plug in tax evasion mechanisms has introduced section 40(A)(3) . This section provides that any expenditure incurred by an assessee (whether individual, company, firm etc.) above Rs. 10000/- other than by account payee cheque or draft or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed shall not be allowed as a deduction. Simply put, this section covers those payments over Rs. 10000/- made by bearer cheque or cash. However, if the payments are made for hiring or leasing carriages for goods such as lorries, trucks etc then the limit is extended to Rs 35000/-. To further counter any tax evasion, the Income Tax department has specified that this section extends to single payments or aggregate of payments m...
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