Section 40 (3) And section 269SS &T

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Tapas Ruparelia (Querist)
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12 September 2009 I would like to know that whether the provisions of section 40(3) are applicable if payment is made exactly for Rs.20000 in CASH?

Further, if a loan of exactly Rs. 20000 is accepted during the year and then repaid, are they required to be reported in FORM 3CD?

would there be any difference if the loan of Rs. 20000 is accepted and repaid in CASh?

CP Ram

CP Ram (Expert)
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12 September 2009 1) No, if payment made in cash is exactly Rs.20000/-. Only if the cash payment exceeds Rs. 20000/-, the dissallowance u/s 40A(3) is attracted.

2) Yes, if loan of Rs. 20000/- is accepted or repaid in cash, then it needs to be reported in Form-3CD.

3) Yes, if you accept and repay Rs.20000/- or more in cash, then it will be in contravention of section 269SS and 269T and the penalty for this contravention is given below:

i) u/s 271D: Any person taking or accepting certain loans and deposits in contravention of provisions of sec. 269SS, will be levied penalty equal to the loan or deposit taken or accepted.

ii) u/s 271E: Any person repaying any loan or deposit specified in sec 269T in contravention of its provisions will be levied penalty equal to the loan or deposit repaid.

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