Explanation
Section 269SS prohibits any person from accepting a loan or deposit or specified sum (advance for transfer of immovable property) of ₹20,000 or more other than by way of account payee cheque, account payee bank draft, or electronic clearing system through a bank account. A bearer cheque is treated as cash and is not a valid mode of receipt under this section. The ₹20,000 limit applies per transaction, but if multiple transactions are made with the same person on the same day, or transactions are treated as part of a single arrangement, they may be aggregated. The penalty under §271D is 100% of the amount accepted in violation — equal to the full amount received. Exceptions include: government receipts, transactions with banking companies, post office savings banks, co-operative banks, NBFCs, and primary agricultural credit societies. The AO has discretion not to levy the penalty if the assessee proves reasonable cause — but this bar is high and cases are frequently litigated. This section works in tandem with §269T (repayment rules) and §269ST (overall cash receipt limit of ₹2 lakh). Verify on the income-tax portal before filing.