Section 269T
Section 269T prohibits any person to repay the loan or deposit or specified sum otherwise than by an account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account, if –
- Amount of loan or deposit, including interest amount, is Rs. 20,000 or more, or
- The aggregate amount of loans or deposits, including the interest amount, held by such person in his own name, or jointly with any person, is Rs. 20,000 or more.
- In nutshell, a person cannot repay the loan or deposit in cash, if the amount is Rs. 20,000 or more.
Exceptions to Section 269T
A person paying Rs. 20,000 or more towards repayment of loan or deposit does not have to comply with 269T if he pays to the following parties –
- The government,
- Any banking company, post office savings bank or co-operative bank,
- Any corporation established by a Central, State or Provincial Act,
- Any Government company as defined in section 617 of the Companies Act, 1956,
- Other notified institutions
Penalty on contravention of Section 269T
100% of the loan or deposit amount will be the penalty leviable by the assessing officer.
Reporting of 269SS & 269T Transactions
In clause 31 of Form 3CD, the tax auditor has to report the transactions that have been hit by the provisions of Sections 269SS and 269T . Both the parties (payer and receiver) have to report the transactions.
For Income tax Returns, GST Registrations and returns you can connect with AGRYA TAX.
