FUNDS TRANSFER BY WAY OF CASH BETWEEN TWO PVT. LTD. COMPANIES

This query is : Resolved

SRINIVASA RAO P (Querist)
Follow

01 July 2024
IS FUNDS TRANSFER BY WAY OF CASH POSSIBLE BETWEEN TWO PRIVATE LIMITED COMPANIES WHERE IN BOTH THE COMPANIES THE DIRECTOR IS THE SAME PERSON WITH MAJORITY SHAREHOLDER.

TRANSFER OF FUNDS BY WAY OF CASH IS REQUIRED TO MEET URGENT BUSINESS PAYMENTS IN ONE OF THE COMPANY AND BOTH THE COMPANIES ARE ENGAGED IN THE SAME TYPE OF BUSINESS.

QUERY IS :

1. IF YES , HOW TO RECORD THE TRANSACTION IN THE BOOKS OF ACCOUNT ?

AND

2. WHAT DOES THE INCOME TAX ACT SAY ?

PLZ ADVISE.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

02 July 2024 1 No not possible.
2 With the new wave of going cashless, a new Section 269ST has been proposed by union government in the Financial bill 2017. It is bringing a great change in the Indian economy as not only affecting the every-day life of commoners but also the upper crust. The reason is placing of restriction over receiving cash from a person beyond a certain limit. Further, Penalty for violating the provisions of this section is too high.