Circular No. 22 of 2017
F.No.370142/10/2017-TPL
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Direct Taxes)
(TPL Division)
***
Dated 03rd July, 2017
Clarifications in respect of section 269ST of the Income-tax Act, 1961
With a view to promote digital economy and create a disincentive against cash economy, a new section 269ST has been inserted in the Income-tax Act, 1961(the Act) vide Finance Act, 2017. The said section inter-alia prohibits receipt of an amount of two lakh rupees or more by a person, in the circumstances specified therein, through modes other than by way of an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account. Penal provisions have also been introduced by way of a new section 271DA, which provides that if a person receives any amount in contravention to the provisions of section 269ST, it shall be liable to pay penalty of a sum equal to the amount of such receipt.
2. Subsequently, representations have been received from non-banking financial companies (NBFCs) and housing finance companies (HFCs) as to whether the provisions of section 269ST of the Act shall apply to one instalment of loan repayment or the whole amount of such repayment.
3. In this context, it is clarified that in respect of receipt in the nature of repayment of loan by NBFCs or HFCs, the receipt of one instalment of loan repayment in respect of a loan shall constitute a ‘single transaction’ as specified in clause (b) of section 269ST of the Act and all the instalments paid for a loan shall not be aggregated for the purposes of determining applicability of the provisions section 269ST.
(Salil Mishra)
Director (Tax Policy & Legislation)
Copy to:-
1. PS to FM/ OSD to FM/ OSD to MoS(R).
2. PS to Secretary (Revenue).
3. The Chairperson, Members and all other officers in CBDT of the rank of Under Secretary and above.
4. All Pr. Chief Commissioners/ Pr. Director General of Income-tax – with a request to circulate amongst all officers in their regions/ charges.
5. Pr. DGIT (Systems)/ Pr. DGIT (Vigilance)/ Pr. DGIT (Admn.)/ Pr. DG (NADT)/ Pr. DGIT (L&R).
6. CIT (M&TP), CBDT.
7. Web manager for posting on the departmental website.
WE ARE RUNNING TRAVEL COMPANY (PVT LTD). WE HAVE B2B ONLINE AGENT. WE PROVIDES CREDIT FACILITY TO OUR AGENT TO BOOK THE TRAVEL RELATED SERVICES AND THEY PAID IN CASH TO US. BELOW IS THE EXAMPLE
25/08/2018 PURCHASE 22000/-
26/08/2019 PURCHASE 35000/-
26/08/2019 PURCHASE 72000/-
26/08/2019 PURCHASE 45000/-
27/08/2019 PURCHASE 105000/-
NOW CREDIT PERIOD OVER AND HE PAID AND DEPOSIT IN BANK
28/08/2019 CASH DEPOSITED 50000/-
29/08/2019 CASH DEPOSITED 75000/-
29/08/2019 CASH DEPOSITED 25000/-
30/08/2019 NEFT 35000/-
30/08/2019 CASH DEPOSITED 25000/-
IS THIS TYPE OF BUSINESS PRACTICE WRONG AND HAVE ANY TAX PENLATIES ON CASH RECEIVING.