Lending of money in excess of rs.20000
Vijay
(Querist) 02 June 2018
This query is : Resolved
Dear Sir,
I am a Legal Money lender Licence holder in Maharashtra State My Q is as follows.
1. Can I lend Money (Unsecured) in excess of Rs.20000/- in Cash ?
2. Can I lend Money (Unsecured) in excess of Rs.20000/- through Bearer Chq ?
In Both the above cases during Criminal Complaint U/s 138 of NI Act Wheather the Case will Dismissed by the Judge as the Money was lent in excess of Rs.20000 in Cash or through Bearer Chq.
Please Guide
As Per the Maharashtra Money Lenders Act 2014 there is no any Specific Provision Regarding restricting Lending of Money in Excess of Rs.20000 in Cash Or through Bearer Chq.
Ms.Usha Kapoor
(Expert) 03 June 2018
1. No cash transaction in money lending above 20 thousand is permuted in view of Section 269SS income tax act.
2.yes you can pay through bearer cheque.
3. In first case yes there shall be problem second case there shall be no problem.
.
4. in the 3rd case you can lendmoney through A/c payee cheque as cheques drawn by drawers are bouncing.
R.Ramachandran
(Expert) 03 June 2018
Ms. Usha Kapoor is totally wrong in interpreting the provisions of Section 269SS of the Income Tax Act.
The question here is whether a money lender can lend money in excess of Rs. 20000/- in cash?
Sec. 269SS prohibits any person from accepting a loan or deposit in excess of Rs. 20000/- in cash.
In this case, the money lender is not accepting a loan but giving a loan. Therefore, the provisions of Sec. 269SS are not attracted from the money lender's point of view.
The next question is whether in Sec. 138 N.I. Act the complaint will be dismissed on the ground that the money was lent in excess of Rs. 20000 in cash. The answer to this question is NO. What is required to be proved is that the cheque issued by the drawer got bounced.
Having said this, it will be advisable to issue the loan amount through account payee cheque.
I do not know for what purpose Ms. Usha Kapoor quoted Sec.13 of Maharashtra Money Lending Act.
Ms.Usha Kapoor
(Expert) 03 June 2018
From some reliable sources I furnished the above information. Instead of finding g faults in my answers you stop contributi0ns to LCI. You only do counting faults.
Ms.Usha Kapoor
(Expert) 03 June 2018
Section 269 SS in laymans language is explained here:r more.
In layman terms, cash loan or deposit from same person of Rs.20000/- or more is not allowable for the purpose of Section 269SS.
Ms.Usha Kapoor
(Expert) 03 June 2018
Mr.Ramachandran,
You are wrong. My stand on interpretation of 269 SS is right and I am vindicated.I proved you wrong for the 3rd time.
R.Ramachandran
(Expert) 03 June 2018
Forget about proving wrong.
Read the provisions of Sec. 269 SS properly. You will realise your folly.
When dealing with law, the question of lay man terms simply does not arise.
Are you saying that you are a layman instead of the purported EXPERT?
I am willing to learn from you, provided you will read one sentence after the other in Sec. 269SS and prove that you are right.
Ms.Usha Kapoor
(Expert) 03 June 2018
I collected that information from reliable sources. I don't want to name. Let us close the topic.
Ms.Usha Kapoor
(Expert) 03 June 2018
Mr.Ramachandran,
we My opinion and your explanation bot are correct. From borrower point of view he should not accept loans or deposits more than Rs.20000 in cash except through account payee cheque. THE embargo I stated regarding section 269 is from borrower side. Hence My answer is cent percent correct.
What all section 269 SS states is borrower should not accep0pt more than Rs.20000 in cash from lender otherwise than through Account payee cheque. Hence in view of section 269 SS of IT Act 1961 any person lender or accepting deposits should not do cash transactions in contravention of section 269 otherwise they are liable for penalties.
R.Ramachandran
(Expert) 03 June 2018
First understand. The query is not from borrower side. The query is from lender side. Therefore, your answering from borrower side has no relevance to the query.
You say you collected from some reliable sources. I am not worried as to what your reliable sources say. I am more concerned about what the law says.
Suppose I lend Rs. 25000/- in cash to some ABC.
Please tell under what Section Income Tax Department will charge me?
Ms.Usha Kapoor
(Expert) 03 June 2018
Under Section 269 SS IT Dept will charge you.
R.Ramachandran
(Expert) 04 June 2018
Section 269SS relates to Mode of taking or accepting certain loans, deposits and specified sum.
It says that No person shall take or accept from any other person any loan or deposit or any specified sum, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, ...
I am not infringing the provisions of the said Section, as I am not taking or accepting from any other person any loan or deposit or any specified sum. RATHER I AM GIVING LOAN.
Therefore, how will the I.T. Department charge me under Sec. 269SS?
Charging a person is not so simple as you assume to be. It is a serious business. After all one has to sustain the charge. What use, if such a charge will fail at the threshold itself!
R.Ramachandran
(Expert) 05 June 2018
Ms. Usha Kapoor: Why are you not reverting?
