Reporting for Section 269SS & 269T for Unsecured Loans

One of the most important annexures attached with Tax Audit Report is Section 269SS and 269T.

The objective of Section 269SS and 269T is to uncover hidden and unaccounted cash during raids.

During raids from income tax authorities, whenever cash is found, common explanation given by assessee is that it was loan received from friend, or family members. Hence to eradicate increasing cash transactions / black money transactions, Section 269SS and Sec 269T are introduced by Government.

 

Section 269SS prohibits acceptance of loan or deposit more than Rs. 20000/- in cash. Whereas Section 269T prohibits repayment of loan or deposit for more than RS 20000/- in cash.

It is now responsibility of Auditors to find out all loans or deposits and report them in Tax Audit Report. If any violation of Section 269SS or 269T is found by Auditors, then it must be reported in Tax Audit Report.

 

LedgerVision Reports for Section 269SS and 269T

LedgerVision runs Tally Ledger Scrutiny and provides below two reports:

 

1.      Probable Unsecured Loans Report

It is commonly found that to escape from reporting to Government, unsecured (money lending or borrowing) transactions are hidden under Sundry Debtors and Creditors.

 

With huge data, it is very difficult for auditors to go through every Debtor/ Creditor ledger and find if its Probable Unsecured Loans / Deposits ledger.

 

LedgerVision provides list of debtors / creditors having only Receipt or Payment entries. No Journal, Purchase or Sales entries are found for these ledgers. Now auditors can have discussion with client and decide whether to report these ledgers in Section 269SS/ 269T.

unsecured loans

 

      

2. Section 269SS / 269T Table

In Tax Audit Reporting, it is required to provide PAN/GST number and address of party. All the receipts, payments and Interest components related to loans also must be provided..

 

In LedgerVision Loans and Liability Configuration Screen, there is an option for mapping “Loans from friends, family, director and partners”. During configuration, user can map ledger groups containing deposit under loans and liability so that mapping for Section 269SS / 269T can be done.

 

Loans and Liability Configuration

 

 

 

 

 

 

 

 

LedgerVision Report gives following details for every Unsecured Loan Ledgers:

  • Name of the Ledger
  • GST Number
  • PAN Number
  • Opening Balances of Ledgers
  • Closing Balances of Ledgers
  • Whether ledgers are squared off or not
  • Amount is received through Cash, Bank, Overdraft, Cash Credit or Journal Entry
  • Interest Received or Paid
  • Amount is paid through Cash, Bank, Overdraft, Cash Credit or Journal Entry
  • Highest Closing Balance during the period

269ss