Cash loan

First of all you can't take cash loan of 1 lakh if you are under audit or even if you are not under audit and the department comes to know about this cash loan they can directly impose a penalty u/s 269ss which is 100% of the amount accepted in loan in the form of cash.

The limit for this transaction is 20000.

It is the limit for one person and you can accept loan from different person below this limit.

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No it won't create any problem but they should be legit people not just imaginary people because this type of transaction generally attract AO attention although they can't do anything about it.

If you need any direct tax consultation for assessment or anything do contact.

Dear Sir,

Hope you are doing well !!

Section 269SS prohibits a taxpayer from taking/accepting loans or deposits or a sum of more than Rs.20,000 in cash. All loans and deposits of more than Rs.20,000 must always be taken through a banking channel.

Failure to comply with provisions of section 269SS could lead to a penalty equal to the amount of loan or deposit or specified sum accepted.

Yes, you can do that. It wouldn't create problem.

Hi,

- For cash loan, limit is Rs.20,000 per person. For above Rs.20,000 payment should be made either through account payee cheque or account payee draft or ECS.

- Penalty is of equivalent amount.

- In case of audit, auditor needs to report it in tax audit report.

Thanks

First of all since you are going to get covered in Tax Audit so you should not take any loan in cash it will get disallowed. & you will be required to pay tax on it.  Apart from that penalty of 100% of loan amount will be separately levied.

Limit u/s 269SS is Rs 20,000. You cannot take more than that in cash from a single person.

Section 269SS prohibits a person from taking/accepting loans or deposits of more than Rs.20,000 in cash. All loans and deposits of more than Rs.20,000 must always be taken through a banking channel. There is a penalty prescribed for dealing in cash transactions. You may take small portion from diff parties within the limit.  However, even paying expenses or interest in cash for more than 10,000 is a problem.  SO you have to be very cautious while dealing in cash as the source would be questioned and investigated.

Dear Sir,

Subject to specified exceptions, a person shall not take or accept loan/deposit from other person otherwise than by the prescribed banking channels i.e. A/c payee cheque or account payee bank draft or by use of electronic clearing system so that the aggregate from such person is Rs.20000/- or 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.

On Contraventions penalty U/s 271D is attracted which is 100% of the amount received.

No, you can't take loan in cash from any person if the maximum outstanding amount during a year exceed INR 20000. This limit is applicable per person. That means you can take loan of 16-17k each from 6 different people and make a corpus of INR 1 lac.