Cash loan

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 March 2012 Dear expert,
I want to know that, interest free loan of Rs. 3 lacs, taken from non-relative in cash for using in business is allowed or not?
The person who is lending, is an agricultureist and his agriculture receipts are use to beget in cash only.
Thanks in advance.

HUZAIFA HUSSAIN

HUZAIFA HUSSAIN (Expert)
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29 March 2012 CASH LOAN ABOVE Rs.20000/- ARE NOT ALLOWED AS PER SECTION 269SS OF THE INCOME TAX ACT. IF SUCH CASH LOANS ARE TAKEN ABOVE SUCH LIMIT THAN 100% OF SUCH AMOUNT IS TREATED AS INCOME.

SEE THAT THE AMOUNT OF RS.3.00 LAKHS IS TAKEN THROU ACCOUNT PAYEE CHEQUE OR IF LENDER IS NOT HAVING BANK ACCOUNT THAN TAKE THE AMOUNT THROU ACCOUNT PAYEE DEMAND DRAFT ONLY.

Querist : Anonymous

Querist : Anonymous (Querist)

30 March 2012 If the borrower takes everyday rs. 18000/- from lender. Whether it would work?

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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30 March 2012 The provisions of Section 269SS apply to the total loan taken during the year and not individual amounts.

If you have already taken a loan and you take another loan in cash and the total amount of loan exceeds Rs. 20,000/-, it is a violation of Section 269SS and penalty equal to the amount of laon shall be levied.