Payment of Installment in cash
Querist : Anonymous
I am a business man and covered under tax audit. I have taken a loan from xyz finance company and due to non encashment of cheque, company wants that I pay Installment of Rs.75000/- in cash (which includes interest also). Can I do so or not.
Whether the auditor will mention this point in his audit report.
Querist : Anonymous
Section 40A(3) read with Rule 6DD , exception of section 40 A(3)
Payment to Specified payee Rule 6DD(a)- Where the payment is made to
•(i) Reserve Bank of India or any banking company as defined in section 5(c) of Banking Regulation Act, 1949;
•(ii) State Bank of India or any subsidiary bank as defined in section 2 of SBI (Subsidiary Banks) Act, 1959;
•(iii) any co-operative bank or land mortgage bank;
•(iv) any primary agricultural credit society or any primary credit society as defined under section 56 of the Banking Regulation Act, 1949;
•(v) Life Insurance Corporation of India.
i.e you can pay cash agasinst auto loan instalments.
https://www.simpletaxindia.org/2009/12/payment-exceeding-20000-40a3-exceptions.html
The payment is towards loan and interest thereon, and as such, not a question of allowance of expenditure or otherwise.
It is a case of repayment of loan and is clearly barred by Section 269T.
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