Tax Disallowance Calculator

Section 40A(3) · Section 43B · Section 43B(h) MSME · Section 14A Rule 8D · Form 3CD Clauses 17 & 21 · FY 2026-27

Client

Financial Year

Tax Rate

Prepared By

Section 40A(3) — Cash Payments

Clause 21 Form 3CD

Cash payments exceeding ₹10,000 to a single person in a single day are disallowed. Exceptions: payments to banks, government, notified entities (Rule 6DD).

#	Payee / Nature of Payment	Amount Paid in Cash (₹)	Allowed (₹)	Disallowed (₹)

Section 43B — Statutory Dues

Clause 17(f) Form 3CD

Statutory dues deductible only if actually paid on or before the due date of filing return u/s 139(1). If paid after due date → allowed only in year of payment.

Statutory Due	Amount in Books (₹)	Paid Before Due Date (₹)	Paid After Due Date (₹)	Disallowed (₹)

Section 43B(h) — MSME Dues

w.e.f. AY 2024-25

Dues to Micro and Small Enterprises must be paid within 45 days of acceptance (or agreed credit period ≤ 15 days if written agreement). If unpaid as at 31 March → disallowed u/s 43B(h).

Total outstanding to MSME as at 31 March (₹) Amount outstanding beyond 45 days / agreed period as on 31 March

Of which, paid within 45 days (₹)

Section 14A — Rule 8D Disallowance

Clause 17(h) Form 3CD

Expenditure relating to exempt income (dividends, LTCG u/s 10(38) etc.) is disallowed. Rule 8D formula applies if AO is not satisfied with assessee's computation.

Exempt Income earned (₹)

Investment yielding exempt income (₹) Average value of investments during the year

Interest expenditure in books (₹)

Total assets (₹)

Direct expenditure for exempt income (₹)

📊 Total Disallowance Summary

Section 40A(3) — Cash payments₹0

Section 43B — Statutory dues₹0

Section 43B(h) — MSME₹0

Section 14A — Rule 8D₹0

Total Disallowance₹0

Add Back to Taxable Income₹0

Tax Impact @ rate₹0

Total disallowance is added back to net profit to arrive at total income. Enter in respective columns of Form 3CD.

About This Tool

The Disallowance Calculator computes disallowances under key sections of the Income Tax Act: Section 40A(3) (cash payments exceeding ₹10,000), Section 40(a)(ia) (TDS default), Section 43B (expenses deductible only on actual payment), and Section 14A (expenses relating to exempt income). These are critical for accurate computation of taxable business income and are commonly reported in tax audit reports (Form 3CD).

How to Use

Select the disallowance type: 40A(3), 40(a)(ia), 43B, or 14A.
For Section 40A(3): enter cash payments exceeding ₹10,000 per person per day.
For Section 40(a)(ia): enter payments on which TDS was deductible but not deducted.
For Section 43B: enter outstanding statutory liabilities (PF, ESI, GST) not paid before ITR due date.
Total disallowance is added back to net profit to arrive at taxable business income.

Frequently Asked Questions

What is the cash payment limit under Section 40A(3)?

Any cash payment exceeding ₹10,000 to a single person in a single day is disallowed. The limit is ₹35,000 for payments to transporters. Payments to banks and government are exempt.

What happens if TDS is not deducted under Section 40(a)(ia)?

30% of the payment is disallowed in computing business income. The disallowance is reversed in the year TDS is eventually deducted and paid.

Is Section 43B applicable to GST outstanding?

Yes. GST, customs duty, PF, ESI, and other statutory levies are deductible only on actual payment under Section 43B. Outstanding statutory liabilities not paid by the ITR due date are disallowed.