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Subclause (b) of clause (1) of proviso of 269st of income tax

CA MANISH BINDAL (CHARTERED ACCOUNTANT ) (535 Points)

05 May 2017

Can anybody tell me subclause(b) of clause (1) of proviso of 269ST

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160690 Points)
Replied 05 May 2017

269ST. No person shall receive an amount of two lakh rupees or more—

(a) in aggregate from a person in a day; or

(b) in respect of a single transaction; or

otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account:

Provided that the provisions of this section shall not apply to—

(i) any receipt by—

(a) Government;

(b) any banking company, post office savings bank or co-operative bank;

(ii) transactions of the nature referred to in section 269SS;

(iii) such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify.

Explanation.—For the purposes of this section,—

(a) "banking company" shall have the same meaning as assigned to it in clause (i) of the Explanation to section 269SS;

(b) "co-operative bank" shall have the same meaning as assigned to it in clause (ii) of the Explanation to section 269SS.]

Also check the following notification:

NOTIFICATION

S.O. 1057(E).- In exercise of the powers conferred by clause (iii) of the proviso to section 269ST of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that the provision of section 269ST shall not apply to receipt by any person from an entity referred to in sub-clause (b) of clause (i) of the proviso to section 269ST.

2. The notification shall be deemed to have come into force with effect from 1st day of April, 2017.

CA MANISH BINDAL (CHARTERED ACCOUNTANT ) (535 Points)
Replied 06 May 2017

Thanku Sir...!!! wheater It can be said that.. Petty Cash Gift Received on Girl Marriage known as "Kanyadaan" would not cover under above section...! and what If I Received Rs 22000/- from as single person (From my brother) on my own Marriage as Cash Gift would it be hit by provision of Section 269SS.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160690 Points)
Replied 06 May 2017

" Petty Cash Gift Received on Girl Marriage known as "Kanyadaan" would not cover under above section..."

Though emotional issue, but to drag out the ecomomy from black money jaws, government has not spared the issue till date. Suggested to receive gifts by cheques/gift vouchers for whatever amount. As it is covered under '(c) in respect of transactions relating to one event or occasion from a person' of the section 269ST.

"and what If I Received Rs 22000/- from as single person (From my brother) on my own Marriage as Cash Gift would it be hit by provision of Section 269SS."

Not 22K, but if you mean to say, 2.20L on any single day/occassion/ event like your own marriage: YES.

CA MANISH BINDAL (CHARTERED ACCOUNTANT ) (535 Points)
Replied 06 May 2017

Thanku Sir for your such a quick responce but I am still in confussion...as As it is covered under '(c) in respect of transactions relating to one event or occasion from a person' of the section 269ST

But here provision shows that One Event Or Occasion from "A PERSON" means if i received in my marriage petty cash gift of Rs 1000 Rs 2000, Rs 600 etc from various persons not from a single person..would it be hit by section (c) of 269ST

And Beside Section 269ST Section 269SS specifically restrict on cash receipt Exceed Rs Twenty Thousand..

"269SS. No person shall take or accept from any other person (herein referred to as the depositor), any loan or deposit or any specified sum, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, if,—

(a) the amount of such loan or deposit or specified sum or the aggregate amount of such loan, deposit and specified sum; or

(b) on the date of taking or accepting such loan or deposit or specified sum, any loan or deposit or specified sum taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or

(c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b),

is twenty thousand rupees or more"

Hence Payment of Rs 22000 will covered u/s 269SS..???

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160690 Points)
Replied 06 May 2017

" But here provision shows that One Event Or Occasion from "A PERSON" means if i received in my marriage petty cash gift of Rs 1000 Rs 2000, Rs 600 etc from various persons not from a single person..would it be hit by section (c) of 269ST"

Yes, you can receive petty cash gifts of such smaller amounts from different persons, but there is liability of hitting the section, when the whole collection exceeds 2 lakhs on the event by receiver. Even here there are divergent views, as the wording says from single person. But till any clarification issued by department, it is better to be on safe side.

Secondly section 269SS is applicable for loans and/or deposits, but not for gifts.

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