Deposit in cash above rs. 20,000

Tax queries 1319 views 3 replies

CA Anand

CEO

48 Points Joined July 2011

Dear All,
In my case of Tax Audit, the assessee is accepting terminal / Security deposit for security of terminals (computer for online business e.g. lottery) provided to customers in CASH exceeding Rs. 20,000/-. It in not in nature of loans accepted. Further terminal deposit is also accepted for any debit balance of customer if remaines unpaid. I want to know whether the assessee is breaching Section 269SS which states that any deposit above Rs. 20,000/- should in through account payee cheque or draft.

Replies (3)

C.A SHASHANK GOYAL

Chartered Accountant

362 Points Joined May 2011

Hi , Sir I am of the opinion that provision of section 269SS also applies to deposits and advances and not only loans , so i think you need to go through entire provision to get a gist out of it .

CA RICHA BADALIA

CA CS

1682 Points Joined August 2011

Section 269SS provides that any loan or deposit shall not be taken or accepted from any person otherwise than by an account payee cheque or account payee bank draft if the amount is Rs 20000 or more.As it covers deposit so there is a violation of Sec 269SS in your case and therefore a penalty equivalent to the amount of contravention should be charged and the contravention must be reorted in tax audit report.