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Unsecured Loan IT

Jigar (B.Com) (135 Points)

02 June 2021  
Is there any rule against issuing loan in cheque and received back in cash???
Do I need its PAN number or address or name of it???

 10 Replies

CMA Poornima Madhava (CMA) (13007 Points)
Replied 02 June 2021

Yes, refer to the provisions of section 269ST regarding cash receipts.

Sourav (Student) (23897 Points)
Replied 02 June 2021

Refer section 269 in whole

AKN FINANCIALSERVICES (146 Points)
Replied 02 June 2021

There is a penalty provision if repayment loan done in cash, refer section 269T for repayment and 269SS for loan given.
1 Like

Ankit Neema (2732 Points)
Replied 03 June 2021

You can't do it, if you received the repayment in cash then it is contrary to the provisions of 269T ,

CMA Poornima Madhava (CMA) (13007 Points)
Replied 03 June 2021

Here the query is from the perspective of lender. Lender has paid in cheque (269SS not applicable) and the lender has received cash being loan repayment by the borrower (269T restricts the borrower to pay in cash). So only 269ST is relevant here I think.

Do let me know if I've missed anything.

Sourav (Student) (23897 Points)
Replied 03 June 2021

269SS and 269T is applicable

Ankit Neema (2732 Points)
Replied 03 June 2021

Poornima Ji , 269ST is restricting the person from receiving a cash amount to more than Rs. 2lakh ,
for Repayment of loan 269T will apply.

AKN FINANCIALSERVICES (146 Points)
Replied 03 June 2021

Agree with Ankit Ji, as I have earlier mentioned the same.
1 Like

CMA Poornima Madhava (CMA) (13007 Points)
Replied 03 June 2021

@ Ankit, Yes, I completely agree with you that 269T restricts repayment of loan in cash above a certain limit.

But here the query seems different. Let's assume the lender disbursed loan in cheque and the borrower repaid in cash. In that case, the borrower has violated the provisions of 269T and hence 100% penalty to the borrower.

Is the lender covered under 269T? Let's analyze:

Here is the excerpts from 269T:

Section 269T prohibits any person to REPAY the loan or deposit or specified sum otherwise than by an account payee cheque or........

As I understand, 269T restricts the person repaying loan (not person receiving)

Now, let's look at excerpts from 269ST:

Section 269ST prohibits any person to RECEIVE an amount of Rs.2 lakh and above in cash:

(i) In aggregate from a person in a day, or (ii) In a single transaction, or (iii) In respect of transactions relating to one event or occasion from a person .

So, on reading 269ST, what I understand is that the lender (person receiving money) is covered under 269ST.

Please share your views.

1 Like

Ankit Neema (2732 Points)
Replied 03 June 2021

@ Poornima Ji , You are right , as 269T is for repayment , it's not apply in receipt. Receipt in cash 269ST will apply.
I agree with your views,
1 Like

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