repayment of loan by book entries

[KAMAL PODDAR]

is it correct to pass journal entries between two parties for repayment of loan i.e. Credit the outstanding loan of A and Debit the outstanding unsecured loan of B.

[CAGOPALJI AGRAWAL]

No it will not be in accordance with the provisions of section 269T of the Income Tax Act.

AI Summary

Loan Settlements via Journal Entries Violate Section 269T of the Income Tax Act A user inquired whether it is permissible to settle a loan by making journal entries that credit the outstanding loan of one party and debit the unsecured loan of another. In response, it was clarified that such a practice would not comply with the provisions of section 269T of the Income Tax Act.