medium10 pts · first answer countsincome-taxbusiness-income

Large cash payment to a supplier

A business pays a supplier ₹25,000 in cash in a single day for goods bought. Under Section 40A(3), what is the income tax effect?

A.Only the amount above ₹10,000 is disallowedB.The entire ₹25,000 is disallowed as a business expense, subject to specified exceptionsC.No effect, because the goods were genuinely boughtD.A penalty of ₹25,000 is levied but the expense is allowed

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Large cash payment to a supplier

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