Which of the following expenditure is liable for disallowance for contravention of section 40A(3) read with rule 6ABBA ?

CS Executive · Tax Laws · PYQS · June 2021
Which of the following expenditure is liable for disallowance for contravention of section 40A(3) read with rule 6ABBA ?
(A) Payment made in cash to Central or State Government exceeding ₹10,000 in a day
(B) Payment in cash in villages having no banking facility for purchase of raw material being agricultural produce
(C) Retrenchment compensation paid to employee ₹40,000
(D) Deposit of cash of ₹22,000 directly into the bank account of the supplier for purchase of goods

Answer & Explanation:

Correct Answer: Option (D)

Official answer key: (D).

Topics: Income Tax

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