Is a cash payment above Rs 10,000 to a supplier allowed as a business expense?

Not in full. If you pay a single person in cash more than Rs 10,000 in a day for an expense, the amount is generally disallowed as a deduction when computing business income. A higher limit of Rs 35,000 applies for payments to transporters for plying, hiring or leasing goods carriages.

Pay by account payee cheque, bank transfer or UPI instead and keep the proof with the bill. Confirm any special case with your CA.