Can we receive cash as repayment of loans and advances given earlier.

Dear Sachin,

Income Tax Law does not prohibit from accepting cash as re-payment of loans.

However Section 269T prohibits the PAYER to make any payment in excess of Rs.20,000 as repayment of loans. In case of violation, penalty u/s 271E shall be levied of a sum equal to the sum of amount paid.

If you have any questions, Pl post the same.

Kind Regards
TaxReply.com 
 

dear sir

thanks for prompt reply. kindly tell me that if a private company offers loan to directors taking business loans from bank, what would be complication under co. act,2013 and income tax act.

Sir,

In exceptional cases there are judgement when the penalty was waived due to genuineness of transactions as in case if Dimple Yadav in Agra Tribunal and simlar other cases also. The genuineness of transaction should have to be proved

Dear Raj,

Thank you for sharing the judgment name and your opinion on the current issue.

Kind Regards
TaxReply.com