India - Income Tax Act 2010 - Saarc

S. 40A I.T. ACT, 1961 1.260twenty thousand rupees, no deduction shall be allowed in respect of suchexpenditure. 19(3A) Where an allowance has been made in the assessment for any year in respectof any liability incurred by the assessee for any expenditure and subsequentlyduring any previous year (hereinafter referred to as subsequent year) theassessee makes payment in respect thereof, otherwise than by an account payeecheque drawn on a bank or account payee bank draft, the payment so made shallbe deemed to be the profits and gains of business or profession and accordinglychargeable to income-tax as income of the subsequent year if the payment oraggregate of payments made to a person in a day, exceeds twenty thousandrupees:Provided that no disallowance shall be made and no payment shall be deemedto be the profits and gains of business or profession under sub-section (3) and thissub-section where a payment or aggregate of payments made to a person in aday, otherwise than by an account payee cheque drawn on a bank or accountpayee bank draft, exceeds twenty thousand rupees, in such cases and under suchcircumstances as may be prescribed 20 , having regard to the nature and extent ofbanking facilities available, considerations of business expediency and otherrelevant factors :]21[Provided further that in the case of payment made for plying, hiring or leasinggoods carriages, the provisions of sub-sections (3) and (3A) shall have effect asif for the words “twenty thousand rupees”, the words “thirty-five thousandrupees” had been substituted.]22[(4) Notwithstanding anything contained in any other law for the time being inforce or in any contract, where any payment in respect of any expenditure hasto be made by 23 [an account payee cheque drawn on a bank or account payeebank draft] in order that such expenditure may not be disallowed as a deductionunder sub-section (3), then the payment may be made by such cheque or draft;and where the payment is so made or tendered, no person shall be allowed toraise, in any suit or other proceeding, a plea based on the ground that thepayment was not made or tendered in cash or in any other manner.](5) 24 [Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.Original sub-section (5) was inserted by the Finance (No. 2) Act, 1971, w.e.f.1-4-1972.](6) 25 [Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.Original sub-section (6) was inserted by the Finance (No. 2) Act, 1971, w.e.f.1-4-1972.]19. For the meaning of the term “expenditure”, see Taxmann’s Direct Taxes Manual, Vol. 3.20. See rule 6DD for cases and circumstances in which payment in a sum exceeding Rs. 20,000may be made otherwise than by an account payee cheque drawn on a bank or accountpayee draft.21. Inserted by the Finance (No. 2) Act, 2009, w.e.f. 1-10-2009.22. Inserted by the Finance Act, 1969, w.e.f. 1-4-1969.23. Substituted for “a crossed cheque drawn on a bank or by a crossed bank draft” by theTaxation Laws (Amendment) Act, 2006, w.e.f. 13-7-2006.24. Prior to its omission, sub-section (5) was amended by the Direct Taxes (Amendment) Act,1974, w.e.f. 1-4-1974, Taxation Laws (Amendment) Act, 1984, w.e.f. 1-4-1985, Finance Act,1984, w.e.f. 1-4-1985 and Finance Act, 1985, w.e.f. 1-4-1985.25. Prior to its omission, sub-section (6) was amended by the Finance Act, 1984, w.e.f. 1-4-1985.