Payments exceeding Rs.2500 by a crossed cheque or bank draft is not applicable u/r 6 DD of Income.Tax Rules 1962. - Income Tax - 1163/CBDT

INSTRUCTION NO. 1163/CBDT Dated : April 7, 1978 Section(s) Referred: 40A(3) , Rule 6DD of IT Rules Statute: Income - Tax Act, 1961 Attention is invited to Rule 6 DD of the I.T.Rules 1962 which specifies the cases and circumstances in which requirement of sec.40A(3) for making payments exceeding Rs.2500 by a crossed cheque or bank draft is not applicable. Clause (f)(iii) of this rule provides that payments made for the purchase of fish or fish products will also be one of the circumstances under which payments could be made other-wise than by crossed cheque or bank draft. A question has arisen whether prawns are also covered by the term fish or fish products appearing in clause (f)(iii) of rule 6DD. The matter has been examined and the Board are advised that prawns, lobsters and crustaceans, molluscs and other marine species come under the definition of fish or fish products. Accordingly payments made for the purchase of these items would be exempt from the requirement of the same being made by crossed cheque/crossed bank drafts.