AMENDMENT in Cash Transaction limit u/s.269T of Income Tax Act 1961

 

Section 269T

269T has been discussed in this article and this deals with cash payment and repayment of loans and deposits. The sections was introduced to curb the black money. Tax evasion is one of the serious problems in India causing economic disparities. False cash transactions give birth to unaccounted money which in turn increases tax evasion.

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 –

• Amount of loan or deposit, including interest amount, is Rs. 20,000 or more, or
• The aggregate amount of loans or deposits, including the interest amount, held by such person in his own name, or jointly with any person, is Rs. 20,000 or more.

In nutshell, a person cannot repay the loan or deposit in cash, if the amount is Rs. 20,000 or more.

Exceptions to Section 269T

A person paying Rs. 20,000 or more towards repayment of loan or deposit does not have to comply with 269T if he pays to the following parties –

• The government,
• Any banking company, post office savings bank or co-operative bank,
• Any corporation established by a Central, State or Provincial Act,
• Any Government company as defined in section 617 of the Companies Act, 1956,
• Other notified institutions

Penalty on contravention of Section 269T

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

Notification No. 56/2021 [F. No. 225/58/2021-ITA.II] / S.O. 1803(E) :

The Central Government, in exercise of powers conferred by clause (iii) of Proviso to Section 269ST of the Income-tax Act, 1961, hereby specifies Hospitals, Dispensaries, Nursing Homes, Covid Care Centres or similar other medical facilities providing Covid treatment to patients for the purpose of Section 269ST of the Income-tax Act,1961 for payment received in cash during 01.04.2021 to 31.05.2021, on obtaining the PAN or AADHAAR of the patient and the payee and the relationship between the patient and the payee by such Hospitals, Dispensaries, Nursing Homes, Covid Care Centres or similar other medical facilities.

RANJEET KUMAR MUNDHRA

Advocate & Financial Engineer

M : 9331618264

Email : TRLC1857@GMAIL.COM