Section 271E – Penalty for Cash Repayment of Loans or Deposits

Tax Glossary Definition

Section 271E – Penalty for Cash Repayment of Loans or Deposits

According to this provision, if a person repays any loan or deposit in cash exceeding ₹20,000, in contravention of Section 269T, a penalty equivalent to the amount repaid is imposed. This penalty discourages unrecorded financial transactions and promotes transparency.

Example: When a loan of ₹25,000 is repaid in cash, the taxpayer becomes liable to a penalty of ₹25,000 under Section 271E.

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