Under the newly proposed Union Budget 2023 the Union Ministry has proposed Penalty for cash loan/transactions against primary co-operatives
It is proposed to amend section 269SS of the Act to provide that where a deposit is accepted by a primary agricultural credit society or a primary co-operative agricultural and rural development bank from its member or a loan is taken from a primary agricultural credit society or a primary co-operative agricultural and rural development bank by its member in cash no penal consequence would arise, if the amount of such loan or deposit in cash is less than 2 lakh.
The present provision says that,Section 269SS & Section 269T deal with cash payment and repayment of loans and deposits. In nutshell, a person cannot repay the loan or deposit in cash, if the amount is Rs. 20,000 or more. And if any person acts in contravention to the provisions of Section 269SS, he shall be liable to pay penalty, a sum equal to the amount of loan or deposit.This has been completely amended by budget 2023.
Until the introduction of Section 269SS culprits would escape the penalty claiming that it was received as loan from friends or relatives. Hence this section had restricted cash deposit and loans at 20,000/-
Further, section 269T of the Act is proposed to be amended to provide that where a deposit is repaid by a primary agricultural credit society (PACS) or a primary co-operative agricultural and rural development (PCARD) bank to its member or such loan is repaid to a primary agricultural credit society or a primary co-operative agricultural and rural development bank by its member in cash, no penal consequence shall arise, if the amount of such loan or deposit in cash is less than ` 2 lakh.
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