(Last Updated On: July 4, 2017)

Circular No. 22 of 2017 [ Income Tax ] Dated 03rd July, 2017

Summary : The receipt of one instalment of loan repayment in respect of a loan shall
constitute a ‘single transaction’ as specified in clause (b) of section 269ST of the Act and all the
instalments paid for a loan shall not be aggregated for the purposes of determining applicability of
the provisions section 269ST.

F.No.370142/10/2017-TPL
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Direct Taxes)
(TPL Division)

Dated 03rd July, 2017

Clarifications in respect of section 269ST of the Income-tax Act, 1961

With a view to promote digital economy and create a disincentive against cash economy, a
new section 269ST has been inserted in the Income-tax Act, 1961(the Act) vide Finance Act, 2017.
The said section inter-alia prohibits receipt of an amount of two lakh rupees or more by a person, in the circumstances specified therein, through modes other than by way of an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account. Penal provisions have also been introduced by way of a new section 271DA, which provides that if a person receives any amount in contravention to the provisions of section 269ST, it shall be liable to pay penalty of a sum equal to the amount of such receipt.

2. Subsequently, representations have been received from non-banking financial companies
(NBFCs) and housing finance companies (HFCs) as to whether the provisions of section 269ST of
the Act shall apply to one instalment of loan repayment or the whole amount of such repayment.

3. In this context, it is clarified that in respect of receipt in the nature of repayment of loan by
NBFCs or HFCs, the receipt of one instalment of loan repayment in respect of a loan shall
constitute a ‘single transaction’ as specified in clause (b) of section 269ST of the Act and all the
instalments paid for a loan shall not be aggregated for the purposes of determining applicability of
the provisions section 269ST.

(Salil Mishra)
Director (Tax Policy & Legislation)