Repayment to creditor over rs.20,000/-

This query is : Resolved

B.P. SRIDHAR (Querist)
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17 June 2013 SIR,

A DEALER TOOK A CASH LOAN OF BELOW RS. 20,000/- AND AFTER ADDING INTEREST TO IT,IT EXCEEDED 20,000/-AND NOW IT IS RS. 50,000 for example.
NOW THE QUESTION IS THAT CAN HE REPAY THE PRINCIPAL AMOUNT TO THE CREDITOR IN CASH AND NOT THROUGH CHEQUE BY PAYING BELOW RS.10,000/- EACH TIME. PL CLARIFY.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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17 June 2013 As the amount of interest has been merged with the loan , so the loan amount has exceeded the limit of Rs. 20000/-. Cash payment in such cases may attract penalty. It is not advisable to pay in cash.
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