Dear Friends,
One of my client accepted loan amounting to Rs. 1,24,000/- by cheque and repaid Rs. 50,000/- in 3 installments (18000+17000+15000) by cash. My doubt is whether these repayments shall be hit by Sec. 269T ? Also, in the reverse case, shall it be covered by 269SS ?
Please share your views..
Thanks in advance..
Yes this will attract 269T , as the aggreegate loan amount exceeds 20k & 269T covers this situation
Yes this will attract 269T , as the aggreegate loan amount exceeds 20k & 269T covers this situation
Section 269T : Section 269T of Income Tax Act provides that any branch of a banking company or a cooperative society, firm or other person shall not repay any loan or deposit
otherwise than by an account payee cheque or account payee bank draft drawn in the name of the person, who has made the loan or deposit, if
(1) The amount of the loan or deposit together with interest is Rs 20000 or more, or
(2) The aggregate amount of loans or deposits held by such person, either in his own name or jointly with other person on the date of such repayment together with interest, is Rs 20000 or more.
For example if X is having loan of Rs 30000 outstanding to Y. Then X cannot repay such loan in cash to Y.
Exemptions from Section 269T: The Following persons are exempted from the purview of section 269T:
a) Government ;
(b) any banking company, post office savings bank or co-operative bank ;
(c) any corporation established by a Central, State or Provincial Act ;
(d) any Government company as defined in section 617 of the Companies Act, 1956
(e) other notified insititutions
Consequenses of contravention of section 269T: Section 271E of Income Tax Act 1961 provides that if a loan or deposit is repaid in contravention of the provisions of section 269T then a penalty equivalent to the amount of such loan or deposit repaid may be levied by the Joint commissioner.
If he repaid the amount to banks sec 269t is not covered
Perfect solution by Kaya..Thank You!!
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