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269 st

Rajat Jain (Chartered Accountant) (22 Points)

04 April 2017

Can a person borrow more than 2 lakh rs from current account in a single day & wheather sec 269 st is applicable for this transaction

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9 Replies

Studentsca (CA Practice ) (3577 Points)
Replied 04 April 2017

Provisions of Section 269ST shall not apply to any receipt by banking company and not from banking company and hence accordingly provisions of Section 269 ST shall be attracted in the above mentioned case.

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GOVERNMENT WANTS PEOPLE USE DEBIT CARD ,

CREDIT CARD , ATM CARD FOR PAYMENT OF

MONEY . IT IS GOOD ALSO RISK IS ALSO LESS

Dhananjay Sharma (14 Points)
Replied 05 April 2017

Yes ofcourse a person can withdraw more than 2 lakh in a single day. There is no such restriction by section 269ST.

The said section deals with restriction on receipt in aggregate of Rs. 2 lakh or more by any person in a single day in respect of single transaction or multiple transactions relating to one event/occasion from a person.

Withdrawal from bank is not a receipt, it is a contra entry. the money has already been received in the bank. its just a transfer from one hand to another hand. This can't be treated as a receipt or transaction, as transaction in general has a mean ' An instance of buying and selling'. So this is neither a receipt nor a transaction.

Moreover as per the exceptions provided in the said section, it will not apply to the

" Transactions of the nature referred to in section 269SS "

and section 269SS allows to accept loans & deposit in cash from bank.

It is worth noting that section 269SS has not been transported in section 269ST, only the nature of transactions has been transported. The nature of the transactions referred to in section 269SS are loan or deposit. Therefore transaction of the nature of loan or deposit are not covered by section 269ST. logically also that seems to be correct position, because transactions of loans would be dealt by 269SS. There can’t be two sections dealing with transaction of similar nature. Section 269SS allows withdrawals of cash from bank of Rs. Two lakh or more

The exclusion has been given by writing the words “transactions of nature referred to in U/s 269SS”. Which means that transaction of nature referred u/s 269SS are to be dealt with section 269SS only. For instance, if any assesse has made a default against the provisions of section 269SS, then penalty should also be levied as per section 269SS & not as per section 269ST & if defaults of section 269SS are excluded from the purview of section 269ST, then transactions allowed by section 269SS are also to be excluded from the purview of this section. There should be no contradiction of the provisions as the earlier is allowing to accept/receive any sum from Bank in cash & the later restricts it & imposes penalty up to 100 % on the same.

Now the question arises that exclusion is only allowed in respect of Loans/CC/OD facilities. What about withdrawal from Deposit facilities like current/saving a/c’s

In my view again this section doesn’t apply on withdrawal from deposit a/c’s as like we said earlier withdrawing money from deposit a/c’s is not a receipt it’s a contra entry, moreover withdrawing own money from own bank account is not any transaction. It is just like holding your money with a trustee or in other hand. As Finance act 2017 has not defined the meaning of transaction for the purpose of section 269ST, so we take the meaning of transaction in general which is “An instance of buying and selling”. Nothing has been bought/sold from/to the bank, so this isn’t a transaction at all.

Thus the above explanations holds a clear view that money can be withdrawn even in excess of Rs. 2 lakh in a single day from a single bank.

Pawan Sharma (Article Trainee) (75 Points)
Replied 05 April 2017

Well Interpreted Furthermore, if we faithfully assimilate any act specially IT 1961 & the rules 1962 rws 295 the major one ever in history there is no room for any demur, then, come what may.