Section 2 - Insertion of new Chapter XXB - Income Tax (Second Amendment) Act, 1981

2. Insertion of new Chapter XXB. In the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the principal Act), after Chapter XXA, the following Chapter shall be inserted, namely:- CHAPTER XXB REQUIREMENT AS TO MODE OF REPAYMENT IN CERTAIN CASES TO COUNTERACT EVASION OF TAX 269T. Mode of repayment of certain deposits. (1) No company (including a banking company), co-operative society or firm shall repay to any person any deposit otherwise than by an account payee cheque or account payee bank draft where the amount of the deposit, or where the amount of the deposit is to be repaid together with any interest, the aggregate of the amount of the deposit and such interest, is ten thousand rupees or more: Provided that where the repayment is by a banking company or co-operative bank, such repayment may also be made by crediting the amount of such deposit to the account (if any) with such company or bank of the person to whom such deposit has to be repaid; Provided further that nothing in this sub-section shall apply to or in relation to the repayment of any deposit on or after the date on which the Income-tax (Second Amendment) Act, 1981, receives the assent of the President. (2) No branch of a banking company or a co-operative bank and no other company or co-operative society and no firm shall repay any deposit made with it otherwise than by an account payee cheque or account payee bank, draft drawn in the name of the person who has made the deposit if- (a) the amount of the deposit together with interest, if any, payable thereon, or (b) the aggregate amount of the deposits held by such person with the branch of the banking company or co-operative bank or, as the case may be, the other company or co-operative society or the firm, either in his own name or jointly with any other person on the date of such repayment together with the interest, if any, payable on such deposits, is ten thousand rupees or more: Provided that where the repayment is by a branch of a banking company or co-operative bank, such repayment may also be made by crediting the amount of such deposit to the savings bank account or the current account (if any) with such branch of the person to whom such deposit has to be repaid: Provided further that nothing in this sub-section shall apply to or in relation to the repayment of any deposit before the date on which the Income-tax (Second Amendment) Act, 1981, receives the assent of the President. Explanation. For the purposes of this section, (i) banking company shall have the meaning assigned to it in clause (a) of the Explanation to sub-section (8) of section 40A; (ii) deposit means any deposit of money which is repayable after notice or repayable after a period. .