Bytes

Bytes - Your weekly dose of
investments, taxes, finance & more.

IT Portal 2.0
www.incometax.gov.in

IT Portal 2.0

Check out the latest videos explaining the various features of the new portal
www.incometax.gov.in
previous arrow
next arrow

Section 269SS & Section 269T - Repayment of Loan

author portrait

Maharshi Shah

Section 269SS
Section 269T

Section 269SS & Section 269T deal with cash payment and repayment of loans and deposits. Both the sections were introduced to curb the black money. Tax evasion is one of the serious problems in India causing economic disparities. In other words, these sections were introduced to curb the increasing cash transactions which are leading to the accumulation of black money as these sections restrict such cash payments.

What is Section 269SS

An individual cannot accept loan or deposit or any other specified sum from another person via an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account if:

Exceptions to Section 269SS

Thus, if any person accepts any loan or deposit or specified sum from the above-mentioned entities, or the entities accept any loan or deposit or specified sum from any person, provisions of Section 269SS will not apply.

Penalty for Violation of Section 269SS

100% of the loan or deposit amount will be the quantum of penalty that can be levied by the assessing officer.

What is Section 269T

Section 269T prohibits any person to repay the loan or deposit or specified sum otherwise than by an account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account, if:

In other words, a person cannot repay the loan or deposit in cash, if the amount is above INR 20,000.

Exceptions to Section 269T

An individual paying INR 20,000 or more towards repayment of loan or deposit does not have to comply with Section 269T if he/she pays to the following parties:

Penalty for Violation of Section 269T

100% of the loan or deposit amount will be the penalty leviable by the assessing officer.

FAQs

Can I repay a loan amounting to more than INR 20,000 in cash? Can I repay a loan amounting to more than INR 20,000 in cash?

No, this will be a violation of section 269T i.e. a person cannot repay a loan amounting to more than INR 20,000 in cash.

What is difference between 269SS and 269ST?

Except for the transactions referred to in Section 269SS and other receipts as exempted by Central Government by notification, Section 269ST of the Act shall apply to every receipt whether taxable or tax free, whether capital or revenue.

Can property be purchased in cash?

The income tax act restricts accepting cash in excess of INR 20,000 in a real estate transaction. So, you cannot accept cash consideration on sale of the property. The property is to be registered at actual sales consideration.

Got Questions? Ask Away!

  1. @Rachit_Awasthi1 The law does not have any restrictions for payment of cash for the transaction of purchase/sale of jewellery or immovable property etc. but if the value of a single transaction exceeds INR 2L, then the seller is prohibited from accepting any cash beyond INR 2L for such transactions.