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Unsecured loan accounts

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This query is : Resolved

SUDARSHAN (Querist)
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31 July 2013 Unsecured Loans 5 lakh only opening balance and no fresh accpetance or repayment during the year hence closing balance also same as 5 Lakh

Interest on this is paid at 5000 per month in cash by debit to interest account in Profit and loss account every month yearly 60000,

Interest is paid in cash every month without passing any journal entry in loan account ,direct interest account is debited for amount of interest paid monthly

Now when doing 44AB Audit for traders following accrual basis of accounting is this correct or it involves voilations of any provision of income tax act or any provison

Do we have to report this anywhere ?

Rupesh Jain

Rupesh Jain (Expert)
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31 July 2013 yes u are violence of sction 269TT
if in any account amount exceeds Rs. 20000/- in any time during the year you can not paid payment otherwise a/c payee cheque or DD.
othwise you have to pay penalty equal to repayment amount

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