Mode of taking or accepting certain loans, deposits and specified sum [Section 269SS] :

Section 269SS provides that no person shall take or accept any loan or deposit or specified sum from any other person (depositor) except by account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account , if –

(i) The amount of such loan or deposit or specified sum or the aggregate amount of such loan, deposit of specified sum; or

(ii) On the date of taking or accepting such loan or deposit or specified sum, any loan or deposit or specified sum taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or

(iii) The amount or the aggregate amount referred to in (i) together with the amount or the aggregate amount referred to in (ii), is Rs 20,000 or more.

The requirement will not however, apply to loan or deposit or specified sum taken or accepted from, or any loan or deposit taken from or accepted by the Government, any banking company, post office saving bank or any co-operative bank, any corporation established by a Central, State or Provincial Act: or any Government company as defined in 2(45) of the Companies Act, 2013. The provisions of this section will also not apply to any loan or deposit or specified sum taken, or accepted by, any institution, association or body or class of institutions, associations, bodies which the Central Government may, for reasons to be recorded in writing notify in this behalf in the Official Gazette. This requirement will also not apply to those cases where the persons involved in the transaction derive income only from agriculture or where neither of them has any income chargeable to tax under the Act.

The expression “loan or deposit” in this section will mean any loan or deposit of money.

“Specified sum” means any sum of money receivable, whether as advance or otherwise, in relation to transfer of immovable property, whether or not the transfer takes place. Section 271D provides for penalty for failure to comply with the provisions of section 269SS – If a person takes or accepts any loan or deposit or specified sum in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum of equal to the amount of the loan or deposit or specified sum taken or accepted.