Sec 40(3) and 269ST of income tax act

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Sec 40(3) disallows certain expenses if not paid by account payee cheque or account payee bank draft. Sec 269ST restricts cash transactions above a certain limit.

Sec 40(3) of the Income Tax Act disallows certain expenses if not paid by account payee cheque or account payee bank draft.
This section aims to promote digital transactions and prevent tax evasion.
For example, if a business pays rent in cash without using a cheque or bank draft, that expense may be disallowed under Sec 40(3).
Sec 269ST of the Income Tax Act restricts cash transactions above a certain limit.
This section was introduced to curb black money transactions and promote a cashless economy.
For instance, if an individual receives Rs. 3 lakh or more in cash for a single transaction, it would be in violation of Sec 269ST.

Sec 40(3) and 269ST of income tax act

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