Paid to ca for payment of taxes above 20000

As you are paying tax in the Bank through the CA, you are not violating the inccome tax law.   If you incurs any expenditure in excess of 20000/- otherwise than by an acccont payee cheque/draft than the amount shall not be allowed as deduction.  As the amount is not a exependiture rather a governemnt dues and you are payeing in a bank throhg a techical expert.  In fact CA is a mediator and carrier of payemnt who conversant with technical and legal aspects of IT law. 

1- Section 40A(3) a It provides that any expenditure incurred as a payment in sum of exceeding Rs.20000/- otherwise of paying with payee account cheque, demand draft or any transaction made by banks like RTGS, shall not be allowed as a deduction. However if payment is being made for hiring or leasing, the limit is 35000.

2- Section 40A(3)(B) It also provides that the payment will be deemed as profits of the business if the expenditure incurred in the books but payment is made exceeding Rs. 20000 in cash, otherwise of paying with payee account cheque, demand draft or any transaction made by banks like RTGS.

3- Section 40A (3) It provides that the payment in a single day should not be exceeding Rs. 20000. It doesn’t mean the single payment shouldn’t 20000 but the aggregate amount should not exceed the limit. Some parties split high value payment into several cash payment for evasion of section 40A (3) a, so this rule is for evasion of payments.

4- There is also a rule that payment made to a person in a single day, otherwise of paying with payee account cheque, demand draft or any transaction made by banks like RTGS, exceeds the limit; the payment will be deemed as profits of the company according to proposed sub-section (3) of section 40(A).

it depends how you account for the transaction if its a cash payment than you can directly pass a entry for tax deposit in the cash book instead of showing payment to CA.its the accounting that matters.

@ pkpworld, sandeep & sanjeev

thanks,

paying above Rs. 20000 to a ca/adv is NEITHER loan/deposit covered u/s 269ss NOR an expenditure for the client consequently no question of dissallowibility.

therefor what could be the consequence if a client pays above Rs. 20000 to a ca/adv for paying of income tax on his behalf

Regards