Can cash payment made for Vehicle and Equipment insurance., Income Tax

[Sanjoy Das]

Dear Sir,

Let us know whether vehicle insurance and equipment insurance made by cash. If it is disallowed , kindly let us know the IT U/s ?

Regards

Sanjoy Das

Posts / Replies

[MAHENDRA SURANA]

Mr. Sanjoy Das

Insurance premium is covered u/s 36(1)(i) of Income tax , 1961. Which silent about cheque or cash payment . But Section 40A(3) of Income tax Act,1961 restrict to Rs, 20,000/- in cash if more than that it should be paid by A/c payee cheque or Bank Draft subject to some condition.Otherwise it may disallowed as per the provision of Sec 40A(3)