APPLICABILITY OF 269SS AND 269T ON NIDHI COMPANY

[Pushkar Gupta]

Dear Sir

We have started a NIDHI Company In Rajasthan, we are maintaining three type of deposit accounts namely RD, FD and Saving account from Member and also granting loan to Members. We have following query.

1. Now company has taken RD from member Range from ₹ 100 to ₹ 500 per day in cash. In accepting cash whether it can be default of sec 269ss. Please explain how can take RD from member. Bank is also denying fro making ECS of ₹ 100 daily for RD amount.
2. Is NIdhi company grant loan to member which is unsecured. Since has plan for micro finance which will be unsecured, it will be range from ₹ 10000 to ₹ 200000 .
3. Whether company can receive repayment in cash for Small loan account which are exceeding ₹ 20,000/- in a year. Is it default of sec 269SS and 269T.

Thanks in Advance.

AI Summary

NIDHI Company Questions Cash Deposit and Loan Repayment Rules Under Sections 269SS and 269T of Income Tax Act A NIDHI Company in Rajasthan is inquiring about the applicability of sections 269SS and 269T of the Income Tax Act regarding cash transactions. The company maintains recurring, fixed, and savings deposit accounts and offers loans to members. They seek clarification on whether accepting daily cash deposits ranging from 100 to 500 violates section 269SS, as banks refuse to process ECS for such amounts. Additionally, they plan to offer unsecured microfinance loans from 10,000 to 200,000 and question if receiving cash repayments for loans exceeding 20,000 annually breaches sections 269SS and 269T.