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

Repayment by book entries is not permissible; such transfers contravene section 269T and its repayment rules.
Repayment by book entries between two parties - crediting one party's outstanding loan and debiting another's unsecured loan - is not acceptable and would contravene section 269T of the Income Tax Act.