To put restriction on the cash transactions & promote digital economy, a new section 269ST has been inserted in the Income-tax Act, 1961 vide Finance Act, 2017. *
Section 269ST – In Brief:
The said section, prohibits receipt of an amount of ` 2 lakh or more by a person,
Otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account:
Provided that the provisions of this section shall not apply to—
Section 271DA – Penal provisions for contravention
Liable to pay penalty of a sum equal to the amount of such receipt…
Whether the provisions of section 269ST of the Act shall apply to
One installment of loan repayment or the whole amount of such repayment (NBFCs or HFCs)..?
The receipt of one installment 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 installments paid for a loan shall not be aggregated for the purposes of determining applicability of the provisions section 269ST.
* W.e.f 01.04.2017
The Author is a budding Tax Law Professional & may be reached at firstname.lastname@example.org
Source; CBDT’s Circular No. 22 of 2017 dated 03.07.2017