Section 40A(3) is a provision of the Act dealing with the taxability of payments that can be considered as Expenditure. Under this provision, any expenditure in the form of allowance or reimbursement, made by an employer to his employees, shall be treated as income in the hands of the employees when the amount of expenditure incurred is not less than the amount specified under sub-section (2) of section 40A, or when the actual expenditure incurred by the employer is not otherwise verifiable (by means of documents, vouchers, etc.).

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