Reporting under section 269t of income tax act
This query is : Resolved
11 October 2017
Dear Sir/Madam,
I work for a Non Banking Finance Company, My question is regarding recent changes in reporting requirements under section 269T in which we have to report the receipts of repayment of loans and advance exceeding Rs. 20000/- otherwise than by account payee cheque. We generally finance auto rickshaws & we receive cash from almost 80% of our borrowers as they generally do not have bank accounts. I want to know if suppose we receive loan installment of Rs. 6000/- per month and 72000/- per year IN Cash from one borrower whether we have to report that also as it is very difficult for an NBFC to report such details then it has such accounts in thousands.
I work for a Non Banking Finance Company, My question is regarding recent changes in reporting requirements under section 269T in which we have to report the receipts of repayment of loans and advance exceeding Rs. 20000/- otherwise than by account payee cheque. We generally finance auto rickshaws & we receive cash from almost 80% of our borrowers as they generally do not have bank accounts. I want to know if suppose we receive loan installment of Rs. 6000/- per month and 72000/- per year IN Cash from one borrower whether we have to report that also as it is very difficult for an NBFC to report such details then it has such accounts in thousands.
21 July 2025
Here’s a clear explanation addressing your question on Section 269T reporting for loan repayments in cash by your NBFC:
Subject: Reporting under Section 269T – Repayment of Loans in Cash by NBFC
Dear Sir/Madam,
Regarding your query on reporting requirements under Section 269T of the Income Tax Act, 1961, here is a clarification:
Key Points on Section 269T:
Section 269T prohibits acceptance of loan repayments or advance payments exceeding Rs. 20,000 otherwise than by account payee cheque/draft or electronic transfer.
This means, if a borrower repays a loan in cash exceeding Rs. 20,000 at a time, it is a violation of this provision.
Your Situation:
You receive monthly installments of Rs. 6,000 in cash, which individually do not exceed Rs. 20,000.
Even if the total cash repayment in a year exceeds Rs. 20,000, Section 269T applies to each single transaction, not the aggregate.
Therefore, monthly cash repayments of Rs. 6,000 do NOT violate Section 269T, as they are each under Rs. 20,000.
You are not required to report each installment unless a single repayment exceeds Rs. 20,000 in cash.
Reporting Requirement:
If any single cash repayment (installment or lump sum) exceeds Rs. 20,000, that transaction must be reported.
For multiple small cash payments (below Rs. 20,000 each), no reporting under Section 269T is needed.
However, it is advisable to maintain proper records of such payments for audit and compliance purposes.
Practical Considerations:
Since your borrowers mostly pay in small cash installments due to lack of bank accounts, reporting each small payment is not required.
If you do receive any cash repayment exceeding Rs. 20,000 in one transaction, you must report that transaction as per IT rules.
Encourage borrowers to adopt banking channels where possible, as it helps compliance and reduces risks.
Subject: Reporting under Section 269T – Repayment of Loans in Cash by NBFC
Dear Sir/Madam,
Regarding your query on reporting requirements under Section 269T of the Income Tax Act, 1961, here is a clarification:
Key Points on Section 269T:
Section 269T prohibits acceptance of loan repayments or advance payments exceeding Rs. 20,000 otherwise than by account payee cheque/draft or electronic transfer.
This means, if a borrower repays a loan in cash exceeding Rs. 20,000 at a time, it is a violation of this provision.
Your Situation:
You receive monthly installments of Rs. 6,000 in cash, which individually do not exceed Rs. 20,000.
Even if the total cash repayment in a year exceeds Rs. 20,000, Section 269T applies to each single transaction, not the aggregate.
Therefore, monthly cash repayments of Rs. 6,000 do NOT violate Section 269T, as they are each under Rs. 20,000.
You are not required to report each installment unless a single repayment exceeds Rs. 20,000 in cash.
Reporting Requirement:
If any single cash repayment (installment or lump sum) exceeds Rs. 20,000, that transaction must be reported.
For multiple small cash payments (below Rs. 20,000 each), no reporting under Section 269T is needed.
However, it is advisable to maintain proper records of such payments for audit and compliance purposes.
Practical Considerations:
Since your borrowers mostly pay in small cash installments due to lack of bank accounts, reporting each small payment is not required.
If you do receive any cash repayment exceeding Rs. 20,000 in one transaction, you must report that transaction as per IT rules.
Encourage borrowers to adopt banking channels where possible, as it helps compliance and reduces risks.
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