CASH TRANSACTION IN INCOME TAX 40A(3) Vs 269SS/T Vs 269ST
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Section 269ST: (For Detail Video Click on the above link, Video Includes Images with example)
Prohibits receipt of an amount of Rs. 2 lakh or more by a person,
In aggregate from a person in a day;
or
In respect of a single transaction;
or
In respect of transactions relating to one event or occasion from a person,
Otherwise than by an A/C cheque or an A/C bank draft or use of electronic clearing system through a bank account:
Provided that the provisions of this section shall not apply to—
any receipt by—
government / any banking company, post office savings bank or co-operative bank;
transactions of the nature referred to in section 269SS – i.e. acceptance of Loan, deposits etc ;
Section 40A(3)
Provides that any expenditure incurred in relation to business is made in a sum exceeding Rs.10,000/- in a single day with a person, otherwise than by account payee cheque or draft shall not be allowed as deduction. This section is applicable for both revenue expenses and Capital expenditures.
Section 269SS
A person shall not take or accept loan/deposit from other person otherwise than by A/c payee cheque or account payee bank draft or by use of electronic clearing system so that the aggregate from such person is Rs.20000/- or more.
In layman terms, cash loan or deposit from same person of Rs.20000/- or more is not allowable for the purpose of Section 269SS.
Section amended by adding the sums received for transfer of immovable property (advance/ otherwise) whether or not ultimately the contemplated transfer takes place. Therefore, the seller of the immovable property will be liable to pay penalty on the amount accepted or taken in cash and not the buyer.
On Contraventions penalty U/s 271D is attracted which is 100% of the amount received.
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