Objective: This section regulates the repayment of loans or deposits or specified advance and similar to section 269SS.

Provision: The amount alongwith interest should be repaid only by an account payee bank draft, account payee cheque or through electronic clearing system via bank account if,

“Specified advance” means any amount of advance in relation to transfer of immovable property.

Exceptions: The section shall not apply if the receiver OR payer are the following parties

• • Government
  • Banking company, post office savings bank or co-operative bank
  • Corporation established by a Central, State or Provincial Act
  • Government company
  • Other institutions as notified by the Government

Consequences of violation: In case of violation, section 271E prescribes the penalty which is equal to the amount repaid.

Illustrations:

Scenario	Date of repayment	Mode of repayment	Amount already o/s	Amount repaid	Balance O/s	Applicability of the section
A	24-Sep-19	Cash	32,000	8,000	24,000	Yes, on INR 8,000
B	14-Jun-18	Cash	20,000	10,000	10,000	Yes, on INR 10,000
C	19-Oct-20	Cash	13,000	6,000	7,000	No
D	01-Jul-19	Cash	50,000	10,000	40,000	Yes, on INR 10,000
	01-Oct-19	Cash	40,000	15,000	25,000	Yes, on INR 15,000
	01-Nov-19	Cash	25,000	1,000	24,000	Yes, on INR 1,000
	01-Dec-19	A/c payee cheque	24,000	19,000	5,000	No
	30-Dec-19	Cash	5,000	3,000	2,000	No

Conclusion:

• In summary, it can be said that no person is allowed to repay loan, deposit or specified advance in CASH of INR 20,000 or more.
• The responsibility to comply with the section is on the ACCEPTOR of such loan, deposit or specified advance.