Sec 269ss and sec 269t of income tax act 1956

Tax queries 346 views 5 replies

Suraj Patil

Article Assistant

25 Points Posted on 01 January 2017

Hello friends...

I need some advice regarding sec 269SS and sec 269T of income tax act. As per plain reading of Both sections, in my opinion the section restricts only accepting and taking of loans; or repayment of loans taken, in cash above 20000.. And hence the penalty is not levied on the person who is lending in cash but the person who is accepting in cash.... Wether my opinion is correct?...if yes, are there any other tax implications on the person who is lending money in cash above 20000.

Replies (5)

nikita garg

ca student

61 Points Posted on 01 January 2017

You can lend money in cash for sure(above 20000 also). There could be some implications indirectly, like the borrower may be asked to explain the source which will point you out, of course. Then you may also be asked to explain the source of money involved in the transaction.

Suraj Patil

Article Assistant

25 Points Posted on 01 January 2017

The amount is accounted money and cash has been withdrawn from CC a/c; but the only thing is the client has lend the money in cash which is above 20000. The borrower has agreed to repay loan through cheque and hence I'm not bothered about the person who has accepted loan in cash ; just concerned about whether there are any other tax implications for the lender. I don't think there will be any problem in proving the source since it is withdrawn money....

Anyways thanks for the reply!

nikita garg

ca student

61 Points Posted on 01 January 2017

In that case the lender has nothing to worry about.

nikita garg

ca student

61 Points Posted on 01 January 2017

There are some case laws also in which lender did not have any bank account and assessee was compelled to accept the loan in cash. The same has been considered a reasonable cause for such transaction.(Balaji traders vs DCIT,2001 (pune))..besides, In any case there is no implications for the lender.