Scope of 269ss and 269t
This query is : Resolved
17 February 2016
Whether 269SS and 269T covers advance given for purchase of plant and machinery by way of mode other than account payee cheque or abnk draft. Will those plant and machinery will be qualified to be considered as 'immovable property' for above sections
17 February 2016
It does not cover any payment made in relation to business... Like purchase or plant & machinery etc...
17 February 2016
What if such amount is paid for acquiring factory building in cash??
17 February 2016
read rule 6DD for payment other than a/x payee cheque.
17 February 2016
it was allowed, but now new rule is there which do nowt allow
17 February 2016
Rule 6DD is exception to section 40 A (3) but my query is regarding 269SS!and 269T
17 February 2016
Right... so for 269 ss & t as i said it does not affect... & Rule 6DD is for building purchase in cash.
23 July 2025
Here’s a clear explanation on **Section 269SS** and **269T** of the Income Tax Act with respect to your queries:
---
### **Section 269SS**
* **Prohibits acceptance of loans or deposits of Rs. 20,000 or more** by a person in **cash**.
* Such loans/deposits **must be received by account payee cheque/draft/bank transfer only**.
* Purpose: To curb black money and unaccounted cash transactions.
### **Section 269T**
* **Prohibits repayment of loans or deposits of Rs. 20,000 or more** in cash.
* Repayment must be through account payee cheque/draft/bank transfer only.
---
### **Do these sections cover advance payments for purchase of plant and machinery?**
* **No.**
* **269SS and 269T specifically apply to loans or deposits, not advance payments for purchase of goods or assets.**
* Advance given for purchase of plant & machinery is treated as a **business transaction**, **not as loan or deposit**.
* Hence, **Section 269SS and 269T do not apply to advance payments for plant & machinery.**
---
### **Are plant & machinery considered 'immovable property' under these sections?**
* **No.**
* Plant & machinery are considered **movable property**, not immovable property.
* Hence, rules related to immovable property (such as Rule 6DD) **do not apply to plant & machinery**.
---
### **What about payment in cash for purchase of factory building?**
* Factory building is **immovable property**.
* **Rule 6DD** prohibits payment of Rs. 20,000 or more in cash for immovable property purchase, allowing payment only through account payee cheque/draft/bank transfer.
* This rule is **independent of Sections 269SS and 269T**, but has a similar purpose of curbing cash transactions in property dealings.
---
### Summary:
| Transaction | Section 269SS/T applies? | Considered immovable property? | Comments |
| -------------------------------------- | ------------------------- | ------------------------------ | ---------------------------- |
| Loan/Deposit acceptance/repayment | Yes | N/A | Must be by cheque/draft only |
| Advance for plant & machinery purchase | No | No | Business transaction |
| Payment for factory building purchase | No (but Rule 6DD applies) | Yes | Payment must be non-cash |
---
If you want, I can also help you with the exact provisions of Rule 6DD or further explain practical compliance tips. Would that be helpful?
---
### **Section 269SS**
* **Prohibits acceptance of loans or deposits of Rs. 20,000 or more** by a person in **cash**.
* Such loans/deposits **must be received by account payee cheque/draft/bank transfer only**.
* Purpose: To curb black money and unaccounted cash transactions.
### **Section 269T**
* **Prohibits repayment of loans or deposits of Rs. 20,000 or more** in cash.
* Repayment must be through account payee cheque/draft/bank transfer only.
---
### **Do these sections cover advance payments for purchase of plant and machinery?**
* **No.**
* **269SS and 269T specifically apply to loans or deposits, not advance payments for purchase of goods or assets.**
* Advance given for purchase of plant & machinery is treated as a **business transaction**, **not as loan or deposit**.
* Hence, **Section 269SS and 269T do not apply to advance payments for plant & machinery.**
---
### **Are plant & machinery considered 'immovable property' under these sections?**
* **No.**
* Plant & machinery are considered **movable property**, not immovable property.
* Hence, rules related to immovable property (such as Rule 6DD) **do not apply to plant & machinery**.
---
### **What about payment in cash for purchase of factory building?**
* Factory building is **immovable property**.
* **Rule 6DD** prohibits payment of Rs. 20,000 or more in cash for immovable property purchase, allowing payment only through account payee cheque/draft/bank transfer.
* This rule is **independent of Sections 269SS and 269T**, but has a similar purpose of curbing cash transactions in property dealings.
---
### Summary:
| Transaction | Section 269SS/T applies? | Considered immovable property? | Comments |
| -------------------------------------- | ------------------------- | ------------------------------ | ---------------------------- |
| Loan/Deposit acceptance/repayment | Yes | N/A | Must be by cheque/draft only |
| Advance for plant & machinery purchase | No | No | Business transaction |
| Payment for factory building purchase | No (but Rule 6DD applies) | Yes | Payment must be non-cash |
---
If you want, I can also help you with the exact provisions of Rule 6DD or further explain practical compliance tips. Would that be helpful?
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