Cash payment exceeding Rs.20000/-

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Baljinder Singh (Querist)

31 December 2009 Dear Sir,

We have make the cash payment for Squarred of Vehicle loan of Rs.9 Lac to Kotak Mahindra Prime Ltd.

Pls help me its allowed under income tax act or create any problem for disallowance.

Its very urgent for take necessary step.

Regards
Baljinder Singh

CA Sidhi Gaur

CA Sidhi Gaur (Expert)

31 December 2009 under Sec 269T of IT ACT, repayment of loan above Rs 20000 should be made through Account payee cheque/bank draft only.

Rakesh Jain

Rakesh Jain (Expert)

31 December 2009 Dear you had to pay your loan by A/c payee checque or DD only u/s 269t. coz u hv already paid an amount of Rs. 9 lakh, as per IT rules u will be liable for 100% penalty of cash payment at the time of Assessment.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)

31 December 2009 Since it is a secured loan there will be no disallowance or penalty.

Baljinder Singh

Baljinder Singh (Querist)

04 January 2010 Further I let me know if we have taken secured loan from Kotak Mahindra Prime Capital Ltd. (NBFC) against Finance of Vehicle after six month we have sold vehilce to Mr. X for Rs. 3 lac and Mr. X directly cash paid to NBFC Rs.2.90 in our account & balance amt. to us and he provide us declaration of cash deposit along with PAN

but loan a/c in the name of us, so cash payment receipt mentioned our name & PAN No.

Pls advise these circumstance cash payment exceeding allowed to us ot not. if not pls help to avoid any penalty

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