19 August 2010
According to Income Tax Act, cash loans beyond Rs.20,000/- are not allowed. You may further refer Sections 69D, 269SS & 269T for the explanation
Sec 69D : Amount borrowed / repaid on hundi except by a/c payee cheque
Sec 269SS : Any person ACCEPTS any loan or deposit otherwise by a/c payee cheque / demand draft of Rs. 20000/- or more.
Penalty u/s 271D for default of sec 269SS : equal to loan/deposit taken/accepted.
Sec 269T : Any Company including Banking Company & its branches, Co-operative Banks & its Branches, Co-operative Society, Firm or other person REPAY any loan or deposit (together wid interest) otherwise by a/c payee cheque / demand draft of Rs. 20000/- or more.
Penalty u/s 271D for default of sec 269T : equal to loan/deposit repaid.
Exceptions : The above restrictions shall not apply if loan/deposit taken/accepted from or repaid to :
Govt.
Banking Company, Post office saving bank or Co-operative Bank,
Govt Companies or Corporation u/s 617 of companies act, 1956,
19 August 2010
No prohibition to Director. If so accepted, Company will be penalized under section 271D of the Income tax Act,1961. Penalty is equal amount of deposit.
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