Section 269SS & 269T-A Small Anti Black Money Step

Section 269SS & 269T

The Finance Act, 2015 amended Section 269SS & 269T for including the transactions in immovable property to curb black money circulation. However, the finance act does not define the ‘Immovable Property’ in the amendment for the purpose of income tax act. But in any case, the immovable property includes lands, building, and rights in land or building.

Section 269SS & 269T-A Small Anti Black Money Step

Section 269SS & 269T

Section 269SS

Under section 269SS of the income tax act; no person shall take or accept from any other person (herein referred to as the depositor); any loan or deposit or any specified sum, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, if

a) The amount of such loan/deposit/specified sum or the aggregate amount of such loan/deposit/specified sum, or

b) On the date of taking or accepting such loan/deposit/specified sum; any loan or deposit or specified sum taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid, or

c)  The amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b),
Is twenty thousand or more.

Provided that the provisions of this section shall not apply to any loan or deposit or specified sum taken or accepted from; or any loan or deposit or specified sum taken or accepted by,

  • the Government
  • any banking company, post office savings bank or co-operative bank;
  • a 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 on this behalf in the Official Gazette

Provided further that 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.

Explanation

For the purposes of this section,

  • Banking company” means a company to which the provisions of the Banking Regulation Act, 1949 (10 of 1949) applies and includes any bank or banking institution referred to in section 51 of that Act
  • Co-operative bank” shall have the same meaning as assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949)
  • Loan or deposit” means loan or deposit of money
  • 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.’

Section 269T

Under section 269T of the income tax act, no branch of a banking company or a co-operative bank and no other company or co-operative society and no firm or other person shall repay any loan or deposit made with it or any specified advance received by 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 or paid the specified advance if,

a) the amount of the loan or deposit or specified advance together with the interest, if any, payable thereon, or

b) 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; if any, payable on such loans or deposits,

c) the aggregate amount of the specified advances received by such person either in his own name or jointly; with any other person on the date of such repayment together with the interest; if any, payable on such specified advances,

is twenty thousand rupees or more.

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/deposit/specified advance 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.

Explanation

  • Banking company” shall have the meaning assigned to it in clause (i) of the Explanation to section 269SS
  • Co-operative bank” shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949)
  • Loan or deposit” means any loan or deposit of money which is repayable after notice or; repayable after a period and, in the case of a person other than a company, includes loan or deposit of any nature.’
  • 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’.

Failure to comply with the provisions of Section 269SS & 269T

  • Under section 271D of the income tax act, 1961; if a loan or deposit is accepted in contravention of the provisions of section 269SS; then a penalty equivalent to the amount of such loan or deposit may be levied by the Joint Commissioner.
  • Under section 271E of the income tax act, 1961; if a loan or deposit is repaid in contravention of the provisions of section 261T; then a penalty equivalent of such loan or deposit repaid may be levied by the Joint Commissioner.

However, no penalty shall be levied; if the failure to comply with the provisions of these ( Section 269SS & 269T ) sections is due to some reasonable cause.

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