Section 40A(3) Cash Payment Disallowance Scanner

Check if a cash payment will be disallowed as a business expenditure

Applies to: FY 2025-26 (AY 2026-27) · Last reviewed: 2026-08-05 · Sources cited in tool footer

Inputs

Payee is engaged in plying, hiring, or leasing goods carriage vehicles (higher ₹35,000 threshold)

Total cash paid to this payee today (₹) — aggregate all payments to this person in a day

Rule 6DD exception that applies

Payment was already claimed as deduction in a prior year on accrual basis (s.40A(3A) scenario)

How it works

Aggregate cash payments to the same person on the same day.
Apply the ₹10,000 general threshold or configured transporter threshold.
Check each Rule 6DD exception and the prior-year accrual case under s.40A(3A).

FAQs

What is the daily cash limit?

Any expenditure paid (or payable and claimed as deduction) in cash or bearer instrument to a single person in a single day exceeding ₹10,000 shall be disallowed

Is the transporter threshold different?

₹35,000 per payment to a person engaged in plying, hiring or leasing goods carriage (higher threshold specifically for transporters)

Are payments aggregated?

The ₹10,000 limit applies per person per day in aggregate — multiple smaller payments to the same person on the same day are aggregated

What is s.40A(3A)?

If the payment was allowed as deduction in an earlier year on accrual basis and is now paid in cash exceeding the threshold, it is deemed income in the year of payment (s.40A(3A))

What are Rule 6DD exceptions?

Bank / financial institution; Government / Reserve Bank of India; No bank facility in village; Book adjustment; Payment for produce bought from cultivators; Commodities exchange / clearing house; Public carrier / transport by road; Gratuity / retirement / VRS payments; Illness or emergency; Foreign travel