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Section 40A(3) Cash Payment Disallowance Scanner
Check if a cash payment will be disallowed as a business expenditure
Inputs
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?
Under s.36(4), Income-tax Act 2025 (earlier s.40A(3), Income Tax Act 1961), any expenditure paid (or payable and claimed as deduction) otherwise than through specified banking or online mode 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 under s.36(4), Income-tax Act 2025 (earlier s.40A(3), Income Tax Act 1961), 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.36(5), Income-tax Act 2025; earlier s.40A(3A), Income Tax Act 1961)
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