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Loans and deposits u/s 269SS and Section 269T
Section 269SS :
This section says that no person shall take from any person any loan or deposit otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account if (1) The amount of such loan or the aggregate amount of such loan and deposit, is Rs.20,000 or more, OR (2) On the date of taking or accepting such loan or deposit, any loan or deposit accepted earlier by such person from the depositor remaining unpaid is Rs.20,000. or more OR (3)The total amount arrived at, by adding the loan accepted during the year and outstanding balance is more than 20,000.
Exceptional cases :
This section doesn’t come into picture in the following cases where any loan or deposit or specified sum taken or accepted FROM, or any loan or deposit or specified sum taken or accepted BY (1)Government (2) Any banking company, post office savings bank or co-operative bank (3) Any corporation established by a Central, State or Provincial Act (4) Any Government company as defined in companies act (5)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 The provisions of this section shall not apply to any loan or deposit or specified sum, where the person from whom the loan or deposit or specified sum is taken or accepted and the person by whom the loan or deposit or specified sum is taken or accepted, are both having agricultural income and neither of them has any income chargeable to tax under this Act. This section comes into picture even a part of the loan or deposit accepted or taken earlier is in cheque and further amount received is in cash which together exceeds or equals 20000 rupees. Examples : In all the following cases loan taken during earlier years is assumed to be unpaid during current year (1) Mr Gireesh gives a loan of 10000 in cash earlier in last yr and gives another loan of 10000 in cash in current year…. Then it is applicable. (2) Arjun gave 10000 rupees loan by cheque to Praveen during last year and in current year he gave another 10000 in cash ….This section will be applicable as the total amount equals to 20000. Here it’s not matter that the loan taken earlier is by cheque. But the penalties are imposed on the amount accepted in cash only. (3) Ameer gave a loan of 15000 by cheque to biswas during last year and gave another 5500 in cash in current year …then also this section would be applicable.
Section 269T :
No branch of a banking company or cooperative bank and no other company or cooperative society and no firm or other person shall repay any loan or deposit made with it otherwise than by an account payee cheque or account payee draft drawn in the name of the person who has made the loan or deposit if : (1) The amount of the loan or deposit together with interest payable there on is Rs.20,000 or more or (2) The aggregate amount of the loan or deposits held by such person with the branch of a banking company or cooperative bank of other company or cooperative society or firm or other person, either in his own name or jointly with any other person on the date of such repayment together with interest if any payable on such loan or deposit is Rs.20,000/- or more. This section won’t be applicable for repayment of any loan or deposit taken or accepted from (1) Government (2) Any banking company, post office savings bank or co-operative bank (3) Any corporation established by a Central, State or Provincial Act; (4) Any Government company as defined in Companies Act.
Penalty for non compliance :
If any of the above provisions are violated then the penalty shall be equal to the amount of loan or deposit taken or accepted or repaid. There are some issues of conflict in this section which I will discuss in my future posts.
