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TMI BlogSection 40A(3) & 40A(3A) - Payment made otherwise than by account payee chequeX X X X Extracts X X X X X X X X Extracts X X X X ..... ny expenditure and subsequently during any PY the assessee makes payment in respect thereof, otherwise than by a cheque drawn on a bank or bank draft or use of electronic clearing system through a bank account the payment so made shall be deemed to be the profits of business and accordingly chargeable to income-tax as income of the subsequent year if the payment made to a person in a day, exceeds 10,000/- * No disallowance shall be made under sub-section (3) where a payment or aggregate of payments made to a person in a day, otherwise than by a cheque drawn on a bank or bank draft or use of electronic clearing system through a bank account, exceeds 10,000/ in such cases having regard to the nature and extent of banking facilities availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sny other mode such as ; * credit card; * debit card. * Net Banking * IMPS (Immediate Payment Service); * UPI (Unified Payment Interface); * RTGS (Real Time Gross Settlement); * NEFT (National Electronic Funds Transfer). and * BHIM (Bharat Interface for Money) Aadhar Pay Adjustment in books [Rule 6DD(d)] - Where the payment is made by way of adjustment against the amount of any liability incurred by the payee for any goods supplied or services rendered by the assessee to such payee. Purchase of certain products [Rule 6DD(e)] - Where the payment is made for the purchase of: i. agricultural or forest produce; or ii. the produce of animal husbandry (including livestock, meat, hides and skins) or dairy or poultry farm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Where the payment was required to be made on a day on which the banks were closed either on account of holiday or strike. Payment to agent [Rule 6DD(k)] - Where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person. Foreign currency [Rule 6DD(l)] - Where the payment is made by an authorized dealer or a money changer against purchase of foreign currency or travelers cheques in the normal course of his business. POINTS TO REMEMBER: * Section 40A(3) shall also apply in case of advance payment for the expenditure made otherwise than by account payee cheque. Disallowance shall be in the year in which expenditure is incurred. * If an assessee makes payment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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