Section 40A → Section 43
Expenses or payments not deductible in certain circumstances
Quick Answer
Section 40A of the Income Tax Act, 1961 (Expenses or payments not deductible in certain circumstances) corresponds to Section 43 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 40A
The starting point is Section 40A of the Income Tax Act, 1961 — expenses or payments not deductible in certain circumstances. Disallows cash payments exceeding Rs. 10,000 in a day (40A(3)) and unreasonable payments to relatives/related parties (40A(2)).
Under the Income-tax Act, 2025 (effective 1st April 2026), Section 40A is retained and renumbered as Section 43 of the Income-tax Act, 2025. Retained. The cash transaction limit of Rs. 10,000 remains a strict barrier against black money generation in businesses.
The transition impact on Section 40A is assessed as High. Forces digital payments for business expenditures.
Sec 40A
Provision Summary
Disallows cash payments exceeding Rs. 10,000 in a day (40A(3)) and unreasonable payments to relatives/related parties (40A(2)).
Sec 43
Provision Summary
Retained. The cash transaction limit of Rs. 10,000 remains a strict barrier against black money generation in businesses.
Key Changes & Highlights
- Related party transactions scrutinized using advanced graph-database mapping of PAN relationships.
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Frequently Asked Questions
Which subject does Section 40A of the 1961 Act cover?
Section 40A of the Income Tax Act, 1961 covers expenses or payments not deductible in certain circumstances. Disallows cash payments exceeding Rs. 10,000 in a day (40A(3)) and unreasonable payments to relatives/related parties (40A(2)).
What is the new section number for Section 40A under the Income-tax Act, 2025?
Section 40A of the Income Tax Act, 1961 maps to Section 43 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. The cash transaction limit of Rs. 10,000 remains a strict barrier against black money generation in businesses.
How does the Income-tax Act, 2025 affect Section 40A in practice?
The transition impact for Section 40A is rated High. Forces digital payments for business expenditures.
What is new about Section 40A under the Income-tax Act, 2025?
Related party transactions scrutinized using advanced graph-database mapping of PAN relationships. These points are specific to Section 40A (Expenses or payments not deductible in certain circumstances).
Disclaimer: This mapping of Section 40A (Expenses or payments not deductible in certain circumstances) to Section 43 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 40A is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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