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269SS: Mode of taking or accepting certain loans, deposits and specified sum.

No person shall take or accept from any other person,

• any loan or

• deposit or

• any specified sum,

amounting to 20,000 or more by way of CASH or Bearer Cheque.

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"LDS" means Loan or Deposit or Specified Sum

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“Specified sum" means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place.

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Permissible Mode: Account payee cheque or account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed (NEFT/RTGS/UPI etc).

Amount taken into account to check limit of 20,000

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a) Individual LDS or aggregate LDS is 20,000 or more.

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    Example: Mr A took loan of 10,000 and advance deposit of 10,000 by Cash from Mr X. This is violation of 269SS since              total amount is 20,000.

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b) On the date of taking LDS, Unpaid LDS taken earlier from a person, is 20,000 or more.

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    Example: On 1st Apr, Mr. A had taken a loan of 20,000 from X. The same is not yet paid. In Jun, Mr. A wants to accept              deposit of 10,000 in Cash from X. Can he do so?

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    No, since unpaid amount is 20,000.

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c) The amount or the aggregate amount referred to in point a or b above is 20,000 or more

     Example: On 1st Apr, Mr. A had taken a loan of 10,000 from X. The same is not yet paid. In June, Mr. A wants to accept             deposit of 10,000 in Cash from X. Can he do so? 

     No, since unpaid amount along with fresh deposit is 20,000.

269SS is not Applicable for LDS taken from:

• 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 clause (45) of section 2 of the Companies Act, 2013 (18 of 2013);

• such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette:

269SS is further not Applicable in following Cases:

• Payer and Payee both have Agriculture Income Only

• Loan or deposit taken from relative in case of emergencies. Not with the intention to evade tax.

• Contribution of Capital in a Firm by a Partner

Penalty for Violation:

Section 271D: 100% of Deposit or Loan or Specified Sum taken or accepted in violation.

Tax Audit Reporting:

Point 31(a) and 31(b) of Form 3CD: Details of Loan or Deposit or Specified Sum accepted in excess of limit shall be disclosed in form 3CD

269T: Mode of repayment of certain loans or deposits.

A Person shall not repay any loan or deposit or any specified advance received by it, by Cash or through bearer cheque, if the amount involved is 20,000 or more.

"Specified advance" means any sum of money in the nature of advance, by whatever name called, in relation to transfer of an immovable property, whether or not the transfer takes place.

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Person means:

• branch of a banking company or a co-operative bank and

• other company or co-operative society

• firm or other person

LDS means Loan or Deposit or Specified Advance

Amount taken into account to check limit of 20,000

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a) Amount of the LDS together with the interest, if any, payable thereon, is 20,000 or more. Or

    Example: Mr. A has taken a loan of 19,000 from Mr. X. Interest of 1,000 is payable on the same.

    Mr. A cannot repay through Cash or bearer cheque as amount is 20,000.

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b) On the date of repayment, the outstanding amount of Loan or Deposit held by such person along with Interest, is                 20,000 or more

     Amount held in his own name or jointly with any other person, both should be considered

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     Example: Mr. A has taken a loan of 10,000 and deposit of 11,000 on 1st Apr. Interest of 2,000 is payable on the same. Mr.         A wants to make payment of total liability in Cash on 30th June. Can he do?

     No, On the date of payment total liability is 23,000.

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c) On the date of repayment, the aggregate amount of specified advance received by such person along with interest is        20,000 or more

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    Amount received in his own name or jointly with any other person, both should be considered

    Example: Mr. A has taken an advance of 15,000 on 1st Apr for transfer of Immovable property. Interest of 2,000 is payable      on the same as on 30th Jun. Mr. A wants to repay advance along with interest in Cash on 30th June. Can he do?

    Yes, On the date of payment total liability is 17,000 only.

Banking Company or Co-operative Bank

Provided that where the repayment is by a branch of a banking company or co-operative bank, such repayment may also be made by crediting the amount of such loan or deposit to the savings bank account or the current account (if any) with such branch of the person to whom such loan or deposit has to be repaid

269T is not Applicable for repayment of LDS taken from:

• 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 (1 of 1956);

• such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette.

Penalty for Violation:

Section 271E: 100% of Deposit or Loan or Specified advance repaid in violation

Tax Audit Reporting:

Point 31(c), 31(d), 31(e) of Form 3CD: Details of Loan or Deposit or Specified advance repaid in excess of limit shall be disclosed in form 3CD.

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