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Cash loan repayment

This query is : Resolved 

Assess cash loan received rs.19,000/- + rs.2000/- interest total 21,000/- cash loan re payment allowed in I.t. act.

As per section 269T, you cannot repay a cash loan including interest of value more than Rs.20,000.

In this context, the income tax department clarified that if you are repaying the loan to NBFCs or HFCs, the one instalment of loan repayment shall constitute a single transaction. And so if the single loan instalment amount is less than Rs.2 lakh, it can be paid in cash. All the instalments paid for a loan shall not be aggregated for the purposes of determining the applicability of Rs.2 lakh limit.

Bajaj Finserv

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