When a cash payment of ₹30,000 is made on 10th May, 2014 towards purchase of raw material effected in the earlier year, i.e., on 5th June, 2012, the amount liable for disallowance under section 40A(3A) would be

CS Executive · Tax Laws and Practice · PYQS · December 2015
When a cash payment of ₹30,000 is made on 10th May, 2014 towards purchase of raw material effected in the earlier year, i.e., on 5th June, 2012, the amount liable for disallowance under section 40A(3A) would be
(A) Nil
(B) 100% of payment
(C) 20% of such payment
(D) 30% of such payment.

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B).

Topics: Income Tax Act, 1961

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