Cash Expenses Limit Reduced from Rs 20000 to Rs 10000 u/s 40A(3)

Cash Expenses Limit Reduced from Rs 20000 to Rs 10000 u/s 40A(3). As per Budget 2017 – Limits reduced to Rs 10000 from 20000 for cash expenses u/s 40A(3). Cash Expenses Limit u/s 40A(3) is Reduced from Rs 20000 to Rs 10000 u/s 40A(3). Union budget 2017 is presented by Arun Jaitley on 1st Feb 2017. As per New Finance bill 2017 Cash Expenses Limit Reduced from Rs 20000 to Rs 10000 u/s 40A(3), check more details from below….

Cash Expenses Limit Reduced from Rs 20000 to Rs 10000 u/s 40A(3)

The existing provision of sub-section (3) of Section 40A of the Act, provides that any expenditure in respect of which payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, shall not be allowed as a deduction. Further, sub-section (3A) of section 40A also provides for deeming a payment as profits and gains of business of profession if the expenditure is incurred in a particular year but the payment is made in any subsequent year of a sum exceeding twenty thousand rupees otherwise than by an account payee cheque drawn on a bank or account payee bank draft.

In order to disincentivise cash transactions, it is proposed to amend the provision of section 40A of the Act to provide the following:

(i) To reduce 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 cash above ten thousand rupees to a person in a day, shall not be allowed as deduction in computation of Income from “Profits and gains of business or profession”;

(ii) Deeming a payment as profits and gains of business of profession if the expenditure is incurred in a particular year but the cash payment is made in any subsequent year of a sum exceeding ten thousand rupees to a person in a single day; and

(iii) Further expand the specified mode of payment under respective sub-section of section 40A from an account payee cheque drawn on a bank or account payee bank draft to by an account payee cheque drawn on a bank or account payee bank draft or use of electronic clearing system through a bank account.

These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018- 19 and subsequent years.

[Clause 15]

Please Download Finance Bill 2017 From Below link….

Finance Bill 2017, Direct tax Changes in Budget 2017 – Download

Other Budget 2017 Updates

• Base year Changed for computation of capital gains from 1981 to 2001
• Revised Fee for Delayed Filing of Income Tax Return – Budget 2017
• Disallowance of depreciation u/s 32 & capital expenditure u/s 35AD on cash payment
• TDS Rates U/s 194J Reduced from 10% to 2% by Finance Bill 2017
• Deemed profit u/s 44 AD reduced from 8% to 6% for digital transaction
• Income Tax Due Dates
• How to submit Response for Outstanding Tax Demand
• Additional Depreciation – Who can Avail?, availability, Rate of Add Dep
• Tax Audit Limit U/s 44AB Increased From 1 Crore to 2 Crore AY 2017-18
• Threshold limit Increased for maintenance of books of accounts
• Penalty on CA & professionals for furnishing incorrect information in statutory report