"What's so dangerous about helping a friend?"You may ask. Yes, there is nothing so dangerous about it, but just a word of caution; A word of caution before you lend money to your friend.
Wherever money transaction comes, one has to beware of the so called "Taxman", the eternal spy in every taxpayer's life. So what is the hitch in lending money to your friend? Continue reading...
I was having an unusually detailed browsing over "The Hindu Business Line" yesterday, when my eyes fell on the article "Diluted check on the cash route". It discussed the various aspects in acceptance and repayment of loans/deposits.
The most important point mentioned was that accepting/repaying loans/deposits beyond Rs.20000 has to be through an account-payee crossed cheque or a bank draft. That means, accepting anything beyond Rs.20000 by cash attracts penalty.
There are various questions on this.
1. Is there any problem for the one who is lending?
2. The main objective of the governing I.T. section, 269SS, is to check the conversion of black money into white money. That is the reason, as discussed in the article, why an account-payee crossed cheque or a bank draft is required for transactions involving more than Rs.20000, which act as due records. Can other routes of transaction like internet banking be treated valid? Or can the rule be extended to them?
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