Transaction Limit of loan u/s 269SS and 269T reduced to Rs. 10,000?

Recently all of us have come across an extra ordinary notification wherein it is being circulated that limit for section 269SS and 269T has been reduced to Rs. 10,000. In this post let’s discuss whether it’s true or not.

The first question which comes to the mind of everyone is why have they made such update on 29.01.2020 i.e. 2 days before the budget and not during the budget?

Now let’s discuss the notification:

Actually there are two parts/ amendment in notification which you can read below:

1. It speaks about insertion of new rule to specify the other electronic modes for clause (d) of first proviso to section 13A, Section 35AD(8)(f), Section 40A(3)/ (3A), second proviso to clause (1) of Section 43, Section 43CA(4), proviso to sub-section (1) of section 44AD, second proviso to sub-section (1) of section 50C, second proviso to sub-clause (b) of clause (x) of sub-section (2) of section 56, clause (b) of first proviso of clause (i) of Explanation to section 80JJAA, section 269SS, section 269ST and section 269T.

2. It says that under rule 6DD in the opening paragraph the words “account payee bank draft, exceeds twenty thousand rupees”,the words, figures and letters “account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as prescribed under rule 6ABBA, exceeds ten thousand rupees”

Now in the second point people thought that this 20,000 limit mentioned here relates to limit mentioned in section 269SS and 269T and same has been changed to 10,000, as limit for section 40A(3) was changed earlier.

However the above limit relates to section 40A(3) and 40A(3A) as the amendment of 10,000 was earlier done only in the section and not in the rule which governs this section i.e. Rule 6DD and now they have brought this notification to bring that amendment to the said rule and rule 6DD only takes care of Section 40A(3)/ (3A) and not 269SS or 269T.

Hence the limit of section 269SS and 269T is still 20,000.

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