What are the Provision of section 269SS and section 269T under the Income Tax Act?
Such provisions regulating the mode of accepting or taking loans or deposits and mode of repayment of certain loans and deposits are contained under section 269SS and 269T of the income tax 1961
1 Applicability of Section 269SS and 269T
1.1 Acceptance of loan:
When we accept loan from any person, section 269SS of Income-tax Act, 1961 is attracted. Section 269SS deals with mode of acceptance of loan which states that no person shall after the date 30-6-1984 take or accept from any other person any loan or deposit otherwise than by an account payee cheque or account payee bank draft, if any of the following amount exceeds 20000.
- a) Any amount of loan or deposit or the aggregate amount of loan or deposit;
- b) On the date of taking loan or deposit, any amount of loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid irrespective of the fact whether re-payment has fallen due or not and
- c) The amount or aggregate amount along with the amount referred to in 1 and 2.
If any of the above bifurcated amount cross specified limit, then provisions of section 269SS become applicable. The provisions of this section shall not apply to any loan or deposit taken or accepted from or any loan or deposit taken or accepted by following.
(ii) Any banking company, post office saving bank or cooperative bank
(iii) Any corporation established by a central, state or provincial act
(iv) Any government company
(v) The person having agricultural income from the person also having agricultural income and none of them has any income chargeable to tax under the income tax act.
1.2 For Repayment of Loan:
Similarly when we repay loan to the person from whom it was taken then section 269T become applicable. Section 269T deals with mode of repayment of certain loans or deposits which states that:
No Branch of a banking company or a co-operative bank and no other company of co-operative 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 bank draft in the name of the person who has made the loan or deposit if any of the following amount Rs. 20000 or more.
- the amount of the loan or deposit together with the interest, if any payable thereon or
- the aggregate amount of the loans or deposits held by such person with the branch of the banking
- company or co-operative bank or as the case may be the other company or co-operative society or the
- firm, or other person either in his own name or jointly with any other person on the date of such repayment together with the interest accrued on it.