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Repayment of loan

29 March 2020

If I have repaid rs 25000 in cash to person then 100 percent penalty is imposed by ao when will he impose and when should I pay is it at the time of filling returns?or only such expenses or disallowed

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5 Replies

rama krishnan (12234 Points)
Replied 29 March 2020

No penalty Will be levied instead the expenses incurred in cash in excess of 10k will be added to your total income and tax will be charged accordingly

(Guest)

There could be 3 situation.
1. You have paid in cash more than specified limit for business expenditure incurred during Current year.
Ans. As per Sec 40A(3), payment above Rs. 10000 in cash will be disallowed and the amount disallowed will be added to your Total Income and you have to pay tax accordingly.

2. You have paid in cash more than specified limit for a business expenditure which was incurred in last year, but payment for which is made in current year.
Ans. As per sec. 40A(3A) payment above Rs. 10000 in cash will be disallowed and the amount disallowed will be added to your Total Income of current year and you have to pay tax accordingly.

3. You have repaid the loan in cash above specified limit.
Ans. In this case Sec 269T says loan repayment of Rs. 20000 or more should not be made in cash and in case you have repaid any loan amount of Rs. 20000 or more in cash, the Joint commissioner will impose the penalty under section 271E equals to the amount repaid and you have to deposit penalty amount with in the period specified in penalty order, which is normally 30 days.

RAJA P M ("Do the Right Thing...!!!") (127148 Points)
Replied 29 March 2020

Yes... I agreed with Mr Ramakrishnan and Mr Karan Singh views...

@ Mr Abhishek Selvam O.,

Yes... penalty imposed as per above said replies by experts...

In other view if You are filing Your ITR with sec 44AA then avoid the cash payment as per You. Otherwise penalty imposed as per Experts view...

In case You will opt sec 44ad (if applicable) and file Your ITR then no problem for the cash payment...

Spurto Consultancy Services (Consultant) (1891 Points)
Replied 29 March 2020

There will be no specific penalty which have to be paid for the payment of Rs. 25000 made in cash.

While filing your IT return, you have to disallow Rs. 25000 u/s 40A(3) and then file your IT return with the required tax payment.

(Guest)

@ spurto consultancy services

There is a penalty provision u/s 271E If you repay loan of 20000 or more in cash.
An equal amount of loan repaid will be imposed as penalty