What is Consequences of accepting cash loans above ₹20,000?
Nexa Consultancy | Startup & Finance Glossary
Under Section 269SS of the Income Tax Act, no person can accept a loan or deposit of ₹20,000 or more in cash. Violation can lead to a penalty equal to 100% of the loan amount.
Startup Example: A founder takes a "loan" of ₹50,000 in cash from a friend to put into the business. This is a violation and can attract a penalty of ₹50,000.
We advise on compliant methods of financing.