19 December 2010
By the virtue of Second Proviso to Section 269SS if both the parties are agriculturist and are not having any taxable source of income then limit of Rs 20000/- is not applicable to them. As such any amount can be accepted as loan by an agriculturist in cash from another agriculturist.
One interesting fact is that - Section 269T is for Mode of Repayment of Certain Loans or Deposits. In this section I have not found that repayment of such loan > 20000,which is taken by an agriculturist from another agriculturist, can be made in cash.
But i have one clarifiation regarding this, 1. Payer has income other than agriculture income which is taxable income also, where as receiver doesnot have bank account in rural area. still the limit of 20,000 not applicable in this case also?
20 December 2010
Limit of 20000/ will apply as any one of them has any income chargeable to tax. As such benefit of Second proviso will not be available.
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