Sec 269ss / sec 269t
This query is : Resolved
CA Ankit Mehta
(Querist)
28 January 2013
If a person transfers money (Rs. 20,000 or more) through "online fund transfer facility" whether such transaction will attract the provisions of Sec. 269SS / Sec. 269T?
CA Ankit Mehta
(Querist)
28 January 2013
I know the provisions of Sec. 269SS / Sec. 269T will not get attracted due to a clarification issued by the CBDT in this regard. But can anyone send me that particular clarification.....
Kindly send me the same....
Kindly send me the same....
23 July 2025
The provisions of **Section 269SS** and **Section 269T** primarily deal with the **acceptance and repayment of loans or deposits** in cash, specifically targeting transactions exceeding ₹20,000.
* **Section 269SS** prohibits **accepting** loans or deposits in cash exceeding ₹20,000.
* **Section 269T** prohibits **repaying** loans or deposits in cash exceeding ₹20,000.
However, both these sections are **concerned with cash transactions** and **do not apply** to **electronic fund transfers** (bank transfers, online transfers, etc.).
---
### Clarification by CBDT
The **CBDT (Central Board of Direct Taxes)** issued a clarification regarding the applicability of **Sections 269SS and 269T** to electronic transfers. According to the clarification:
* **Online fund transfers** (or any form of **banking transactions**, such as **NEFT, RTGS, IMPS, etc.**) are **not considered as cash** transactions.
* Therefore, **such transactions do not attract the provisions of Section 269SS or Section 269T**.
This means that if a person transfers **₹20,000 or more** via **online transfer** or through any **electronic banking facility**, these transactions are not subject to the restrictions of **Section 269SS** and **Section 269T**.
---
### Why It Doesn’t Apply:
1. **Cash Definition**: The **Income Tax Act** specifically defines "cash" as physical **currency** (coins, notes, etc.). Since online fund transfers do not involve the physical movement of cash, they fall outside the scope of **Section 269SS** and **269T**.
2. **Section 269SS and 269T** are concerned with **loans and deposits** in **cash** only, and **not electronic or bank transfers**.
---
### Conclusion:
As you rightly mentioned, **Section 269SS/269T will not apply** to transactions done via **online fund transfer**. Unfortunately, the specific **CBDT clarification** document might not be readily available for sharing, but it has been consistent that **electronic transactions do not attract the provisions of Section 269SS/269T**.
Would you like any further clarification on this or any related queries?
* **Section 269SS** prohibits **accepting** loans or deposits in cash exceeding ₹20,000.
* **Section 269T** prohibits **repaying** loans or deposits in cash exceeding ₹20,000.
However, both these sections are **concerned with cash transactions** and **do not apply** to **electronic fund transfers** (bank transfers, online transfers, etc.).
---
### Clarification by CBDT
The **CBDT (Central Board of Direct Taxes)** issued a clarification regarding the applicability of **Sections 269SS and 269T** to electronic transfers. According to the clarification:
* **Online fund transfers** (or any form of **banking transactions**, such as **NEFT, RTGS, IMPS, etc.**) are **not considered as cash** transactions.
* Therefore, **such transactions do not attract the provisions of Section 269SS or Section 269T**.
This means that if a person transfers **₹20,000 or more** via **online transfer** or through any **electronic banking facility**, these transactions are not subject to the restrictions of **Section 269SS** and **Section 269T**.
---
### Why It Doesn’t Apply:
1. **Cash Definition**: The **Income Tax Act** specifically defines "cash" as physical **currency** (coins, notes, etc.). Since online fund transfers do not involve the physical movement of cash, they fall outside the scope of **Section 269SS** and **269T**.
2. **Section 269SS and 269T** are concerned with **loans and deposits** in **cash** only, and **not electronic or bank transfers**.
---
### Conclusion:
As you rightly mentioned, **Section 269SS/269T will not apply** to transactions done via **online fund transfer**. Unfortunately, the specific **CBDT clarification** document might not be readily available for sharing, but it has been consistent that **electronic transactions do not attract the provisions of Section 269SS/269T**.
Would you like any further clarification on this or any related queries?
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