Loans, deposits, advances ≤ ₹20K cash. Section 269T mirror rule for repayment. 100% penalty under 271D/271E. Section 269ST: any business cash > ₹2L banned. Use banking channels.
Section 269SS = CASH TRANSACTION LIMIT on LOANS, DEPOSITS, ADVANCES. CANNOT receive CASH > ₹20,000 in aggregate from same person for: (1) Loan. (2) Deposit. (3) Advance against immovable property. (4) MUST use banking channels (cheque, NEFT, RTGS, UPI). PURPOSE: curb black money + cash transactions. APPLIES: individuals, HUF, business entities. EXEMPT: government, banks, PSUs, registered institutions. EXAMPLE: ₹50K loan from friend in cash = VIOLATION. Must be cheque/bank transfer.
Section 269T = CASH LIMIT on LOAN/DEPOSIT REPAYMENT. CANNOT repay CASH > ₹20,000 to same person: (1) Loan + interest. (2) Deposit + interest. (3) MUST repay via banking channels. EXAMPLE: ₹30K loan from cousin. (a) Repay cash ₹15K + ₹15K = OK (each transaction < ₹20K, separate days). (b) Repay cash ₹30K single = VIOLATION. (c) BEST: cheque/UPI ₹30K. STRATEGIC: always use bank transfers for any loan/deposit repayment to avoid penalties.
PENALTY FOR VIOLATION: (1) SECTION 271D: 100% PENALTY of amount received in violation of 269SS. (2) SECTION 271E: 100% PENALTY of amount repaid in violation of 269T. (3) EXAMPLE: ₹1L cash loan = ₹1L penalty + tax notice. (4) PENALTY = 100% of violation amount. (5) AVOIDABLE: Use banking channels. (6) JOINT + SEVERAL: payer + receiver both penalized. ENGAGE CA if violation identified — disclosure + remediation possible. AVOID by routing ALL loans/deposits through banking system.
COMMON SCENARIOS: (1) FAMILY LOANS: parent giving cash ₹5L to child. VIOLATION! Use banking. (2) PROPERTY ADVANCE: ₹2L cash advance to seller. VIOLATION! Cheque/UPI required. (3) BUSINESS LOAN from friend: ₹50K cash = VIOLATION. Bank transfer mandatory. (4) FIXED DEPOSIT cash > ₹20K from individual: bank may report. SAFE PRACTICES: (1) ALL loans/deposits via cheque/NEFT/RTGS/UPI. (2) MAINTAIN paper trail. (3) DOCUMENT loan agreement. (4) PAN of both parties for > ₹2L transactions. (5) BANK STATEMENT proof.
COMPLIANCE STRATEGY: (1) NEVER receive/pay cash > ₹20K for loans/deposits/advances. (2) USE banking channels — cheque, NEFT, RTGS, UPI, IMPS. (3) DOCUMENT all loan agreements with PAN. (4) AVOID property advance in cash. (5) BUSINESS RECEIVABLES > ₹2L (Section 269ST): even non-loan cash receipts > ₹2L prohibited! Wider rule. (6) PROFESSIONAL FEES, RENT, BUSINESS sales > ₹2L cash also banned (269ST). (7) CASH WITHDRAWAL > ₹1cr per year: 2% TDS Section 194N. (8) HIGH-VALUE TRANSACTION reporting to ITD by banks. (9) ITR FILING: high-cash users on radar. ENGAGE CA for cash-intensive businesses (jewelry, real estate, restaurants).