Sec 269ss / sec 269t

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CA Ankit Mehta (Querist)
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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

CA Ankit Mehta (Querist)
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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....

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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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.).

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### 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**.

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### 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**.

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### 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**.

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