Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Cash Transactions

Priyanka Bhatt (Account Assistant) (37 Points)

18 December 2009

I would like to get the feed back that whether a company can repay the amount of outstanding loan in form of Cash by installment of Rs.20,000/Month.?

Reply
Follow
Share

25 Replies

Sunil (Trader) (2611 Points)
Replied 18 December 2009

No. Any repayment of Rs.20,000/- and above in a year has to be by a/c payee aheque or d/d. You cannot repay by cash, NEFT, RTGS or bank transfers. The repayment has to be strictly by these instruments crossed as applicable.

Upgrade to CAclubindia Pro. Subscribe Now!

Vivek Jarial (Student) (272 Points)
Replied 18 December 2009

you have to pay the installment of loan by A/c payee cheque not in cash.

G.E.Sudarsan (Audit Assistant) (97 Points)
Replied 18 December 2009

Hi priyanka, Refer Sec. 40A(3). with Rule 6DD

CA.Tarun Maheshwari (CA, DISA) (7150 Points)
Replied 18 December 2009

No, you can not pay any amount more then Rs. 20000 in cash. It can be paid by banking channel only. And the relevant section is not 40A(3). It is Section 269SS/ 269T.

P-A-W-A-N (TAX - MANAGER AT GURGAON) (541 Points)
Replied 18 December 2009

Refer Sec. 40A(3). with Rule 6DD

Upgrade to CAclubindia Pro. Subscribe Now!

CA.Tarun Maheshwari (CA, DISA) (7150 Points)
Replied 18 December 2009

I dont know why people are quoting wrong section. Section 40A(3) is for payment for expenses for more then Rs. 20000/- , and not for loans repayment. For repayment of loan in cash for more then Rs.20000/-, Section 269SS/269T are the relevant sections.

Sumit A. Raval (Student) (190 Points)
Replied 18 December 2009

Tarun Sir is Right. U should also refer other relevant sections also.

kabirsen (student) (251 Points)
Replied 18 December 2009

if u repay in cash 269t getsa attracted.

it wud be reported in the audit report.sec 269T is as follows which prohibits such pmt.

⁶⁶[Mode of repayment of certain loans or deposits⁶⁷.

269T. No branch of a banking company or a co-operative bank and no other company or co-operative society and no firm or other person shall repay any loan or deposit made with it 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

(a) the amount of the loan or deposit together with the interest, if any, payable thereon, or

(b) the aggregate amount of the loans or deposits held by such person with the branch of the banking company or co-operative bank or, as the case may be, the other company or co-operative society or the firm, or other person either in his own name or jointly with any other person on the date of such repayment together with the interest, if any, payable on such loans or deposits,

is twenty thousand rupees or more:

Provided that where the repayment is by a branch of a banking company or co-operative bank, such repayment may also be made by crediting the amount of such loan or deposit to the savings bank account or the current account (if any) with such branch of the person to whom such loan or deposit has to be repaid :

kabirsen (student) (251 Points)
Replied 18 December 2009

penalt for contravention of sec 269t.

penalty= the amt repaid using cash

(Guest)

Originally posted by : CA.Tarun Maheshwari
	No, you can not pay any amount more then Rs. 20000 in cash. It can be paid by banking channel only. And the relevant section is not 40A(3). It is Section 269SS/ 269T.