Repayment of loan - Conditions of section 269SS / 269T

[Common Issues]

Assessee has taken loan in earlier year was Rs. 22000/- through cheque.

Assessee has paid part in cash Rs. 3000/- in the year 2009-10. This fact was reported  in the tax audit report. Now in the year 2010-11 he paid the balance amounting to Rs. 19000/- in cash.

Whether this facts are required to be reported in the form 3CD regarding payment of loan made against cash?

Whether in the second year, assesse would be held as defaulter being payment in contravention of   Section 269SS/ 269T

[CAGOPALJI AGRAWAL]

To my view since the loan outstanding was below Rs. 20K hence no contravention of section 269T.

[malhar shenoy]

Reporting u/s 269T is not applicable , because on the day of repayment of loan the amount payable together with interest thereon is less than Rs 20000/-.

[Venkata Ramana Dhara]

The assessee committed default while repaying part of the loan when the aggregate was more than Rs. 20000.00. That was supposed to be reported in the report for that year [2009-10]. Once the aggregate of loan is less than Rs. 20000.00 there is no default. The loan can be repaid in cash once the aggregate is less than Rs. 20000.00. No reporting is required for 2010-11

AI Summary

Cash repayment threshold determines cash-payment prohibition: no contravention if outstanding falls below threshold; earlier excess requires reporting. Repayment by cash is not a contravention if the amount payable on the date of repayment, including interest, is below the statutory cash repayment threshold. Repayments made when the aggregate payable exceeded the threshold should be disclosed in that year's tax-audit report/Form 3CD; subsequent cash repayment after the outstanding falls below the threshold does not constitute default and typically requires no additional reporting.