Cash payments exceeding 20,000 Sec 40A 3<br /><br /><br />No deduction shall be allowed in respect of such expenditure .for which <br /><br />Individual payment, or aggregate of payments made by assessee to a person in a day, exceeds Rs. 20,000.<br /><br />and such payments are made otherwise than by an account payee cheque or account payee bank draft, <br /><br />Exception : - No disallowance shall be made in following cases where payments are made to :-<br /><br />RBI, SBI or any banking company, or any primary credit society, or any coop banks, or LIC. <br />Government under any legal requirement, say Sales Tax, Custom duty and others ;<br />Payment in town or village not served by any bank<br />Payment by book adjustment against liability<br />By credit card, debit card Internet banking or any other similar mode. <br />Towards purchase of agricultural or forest product or produce of any animal husbandry or fish or similar product to cultivator, grower or producer of such article. <br />Payment made on a bank Holiday<br />Payment to employee/ heir of employee in connection with retirement, resignation, retrenchment, <br /> discharge or death for gratuity, retrenchment compensation or similar terminal benefit not exceeding <br /> 50,000
