In the Budget 2023, the Finance Minister suggested a new cash transaction cap for agricultural loans and deposits under section 269SS of the Income Tax Act, 1961. The fine was exempt up to 2 lakh rupees.
According to the budget speech, it is proposed to amend section 269SS of the Income Tax Act to provide that when a member makes a cash deposit with a primary agricultural credit society or a primary co-operative agricultural and rural development bank or borrows money from one of these institutions, no legal repercussions will occur if the amount of the loan or deposit is less than Rs. 2 Lakhs.
There will be no penal action under section 269SS on making deposit or taking loan to agricultural credit society till the limit of rupees 2 lakhs through cash.
A person who takes loans and deposits in cash in excess of the established limit is subject to a 100% penalty of the whole loan amount or deposit amount. While accepting cash payments, the money’s recipient must make sure that the rules of Section 269SS are followed. However, if the receiver can adequately justify the basis for such transactions, the penalty may be avoided.
If a person pays to one of the following organisations and pays Rs. 20,000 or more for the repayment of a deposit or loan, they are exempt from Section 269T of the Income Tax Act:
Additionally, it is proposed to amend Section 269T of the Income Tax Act, no penalties will apply if the amount of the loan or deposit in cash is less than “2 lakh” as similar to Section 269SS of Income Tax Act.
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