TaxTMI 
TaxTMI 
Capital Contribution Sec 269ST?
X X X X Extracts X X X X
X X X X Extracts X X X X
....apital Contribution Sec 269ST?<br> Query (Issue) Started By: - Hithik Dated:- 23-3-2026 Last Reply Date:- 20-4-2026 Income Tax<br>Got 1 Reply<br>Income Tax<br>Whether capital contributions made by partners in cash exceeding the threshold under S.269, contributed as a single sum or in multiples., would this tax fall under S.269ST(c) as receipts arising from a single event as capital call or partner....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ship agreement.? Reply By YAGAY andSUN: The Reply: Section 269ST of the Income-tax Act, 1961 prohibits receipt of Rs. 2,00,000 or more otherwise than by an account payee instrument or prescribed electronic modes, in three situations, including under clause (c), i.e., in respect of transactions relating to one event or occasion from a person. Capital contribution by a partner to a partnersh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ip firm is a capital receipt in the hands of the firm and represents an inflow pursuant to the partnership arrangement. The firm and the partner are distinct persons for the purposes of Section 269ST. Where a partner makes capital contribution in cash exceeding Rs. 2,00,000, whether: • as a single lump sum, or • in multiple instalments aggregating to Rs. 2,00,000....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or more, the applicability of Section 269ST depends on the characterization of the underlying transaction. If the contribution is made pursuant to a single capital call, obligation under the partnership deed, or a defined event (e.g., induction of partner, agreed capital infusion), such receipts may be regarded as relating to "one event or occasion" within the meaning of clause (c). In such....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a case, splitting the contribution into multiple cash instalments would not obviate the prohibition, and the aggregate receipt would attract Section 269ST. Conversely, where capital contributions are independent, unrelated infusions made at different points of time without linkage to a single event or obligation, an argument may be advanced that clause (c) is not attracted. However, even in su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch cases, clause (a) (receipt from a person in a day) or clause (b) (in respect of a single transaction) may still operate, depending on facts. Accordingly, capital contributions in cash exceeding the prescribed threshold are susceptible to violation of Section 269ST, particularly where they are traceable to a single capital arrangement or obligation. The safer and legally compliant course is t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o route such contributions through prescribed banking channels to avoid exposure to penalty under Section 271DA.<br> Discussion Forum - Knowledge Sharing ....