Applicability of 40A(3), Income Tax

[Pradeep Kumar]

Dear all

If we make the payment in cash more than 20000 then 40A(3) will be considered. My question is , If we make the payment of salary or full and final settlement to any employee then there is any need to check the compliance of 40A(3).

Thanks and regards

Pradeep Kumar

Posts / Replies

[Harish Chander Bhatia]

Applicability of 40A(3)

 Yes, section 40A(3) is squarely applicable to the salaries paid, as it is claim as an expenses. It is advised the higher salary should always be paid by cheques  to establish it genuniity. 

[Pradeep Kumar]

Thanks Harish.....