Money Expenses Limit Decreased from Rs 20000 to Rs 10000 u/s 40 A( 3 ).
The existing provision of sub-section (3) of Area 40 A of the Act, offers that any expenditure in regard of which payment or aggregate of payments made to an individual in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, surpasses twenty thousand rupees, will not be enabled as a reduction. Further, sub-section (3A) of section 40 A likewise offers deeming a payment as profits and gains of company of profession if the expenditure is incurred in a particular year however the payment is made in any subsequent year of an amount surpassing twenty thousand rupees otherwise than by an account payee cheque made use of a bank or account payee bank draft.
In order to disincentivise money transactions, it is proposed to amend the arrangement of area 40 A of the Act to provide the following:
( i) To minimize the existing threshold of cash payment to a person from twenty thousand rupees to ten thousand rupees in a single day; i.e any payment in money above ten thousand rupees to a person in a day, will not be allowed as reduction in computation of Income from “Revenues and gains of business or occupation”;-LRB- .
( ii) Deeming a payment as earnings and gains of business of occupation if the expense is sustained in a specific year but the cash payment is made in any subsequent year of an amount exceeding ten thousand rupees to an individual in a single day; and
( iii) More broaden the defined mode of payment under particular sub-section of section 40 A from an account payee cheque drawn on a bank or account payee bank draft to by an account payee cheque made use of a bank or account payee bank draft or use of electronic clearing system through a checking account.
These changes will work from 1st April, 2018 and will, accordingly, use in relation to the evaluation year 2018- 19 and subsequent years.
[Clause 15]
Please Download Financing Bill 2017 From Below link …
Finance Costs 2017, Direct tax Changes in Budget 2017– Download
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