Can loan repayment be done in cash?

In nutshell, a person cannot repay the loan or deposit in cash, if the amount is Rs. 20,000 or more.

What is a loan demand?

A demand loan is a loan that a lender can require to be repaid in full at any time. This condition is understood by the lender and the borrower from the outset. Borrowers like the convenience and flexibility associated with demand loans because they can repay them in full or in part at any time, without penalty.

What is the limit of making payment in cash in a day?

Income Tax law provides for permissible cash expenses as deductible expenses for cash payments exceeding Rs 20,000 in a single day i.e. payment is made otherwise than by electronic clearing system or an account payee check or an account payee bank draft won’t be permitted as a deductible expense.

How much loan can I take cash?

Under the Income Tax Act, loans of more than Rs 20,000, even from family members, cannot be taken in cash or bearer cheque. Breach of this provision (269SS) of the Act attracts a penalty that matches the loan amount under section 271D.

What does it mean to have a demand loan?

A demand loan is granted to a brokerage house needing short-term capital for financing the margin portfolios of clients. The lending bank can demand the repayment of the loan at any time. On the flipside, the brokerage house may repay a demand loan all at once without prepayment penalties.

Can a brokerage house demand a loan at any time?

The lending bank can demand the repayment of the loan at any time. On the flipside, the brokerage house may repay a demand loan all at once without prepayment penalties. Demand loans are collateralized using securities, and interest accrues everyday at an unsecured adjustable rate.

What happens if a business refuses to accept cash?

When acceptance of a cash payment is required by state law, the state will often impose a penalty or other consequence on a business that refuses to accept cash. For example, in California a landlord’s refusal to accept cash payment of rent may cause the payment to be deemed excused.

Can a company loan money to its shareholders?

Lending corporate cash to shareholders can be an effective way to give the shareholders use of the funds without the double-tax consequences of dividends. However, an advance or loan to a shareholder must be a bona fide loan to avoid a constructive dividend.