CAF-2 · Chapter 7 · Question 5 of 15
Under Section 21, any expenditure paid under a single account head exceeding Rs. 250,000 made in cash (otherwise than through a banking channel) is disallowed. Which of the following cash payments exceeding Rs. 250,000 is an EXCEPTION and still ALLOWED as a deduction?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) C) Payment for utility bills and freight charges.
Explanation
The restriction of Rs. 250,000 for cash payments does not apply to expenditures on account of utility bills, freight charges, travel fare, postage, and the payment of taxes, duties, or fines.
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