23/09/2026
Tax Audit Checklist | Section 269SS
🔎 Section 269SS – Key Checks During Tax Audit
While preparing the Tax Audit Report (Form 3CD), CAs should carefully examine compliance with Sections 269SS, 269ST and 269T.
Clause 31 is not merely a year-end balance check. It requires a transaction-level review of loans, deposits and specified sums accepted or repaid during the year.
💰 Key Threshold under Section 269SS
Transactions involving ₹20,000 or more require examination, subject to the applicable provisions.
The ₹20,000 threshold is considered person-wise and on an aggregate basis. It may be attracted where:
* The new loan, deposit or specified sum is ₹20,000 or more;
* An earlier unpaid amount from the same person is already ₹20,000 or more; or
* The fresh receipt, together with the earlier unpaid amount, reaches ₹20,000 or more.
⚠️ Accordingly, a receipt below ₹20,000 may still fall within the scope of Section 269SS if the aggregate amount crosses the prescribed threshold.
📋 Key Areas to Verify
* Loan and deposit ledgers
* Opening and closing balances
* Fresh receipts during the year
* Repayments and journal adjustments
* Transactions with related parties / directors / partners
* Mode of receipt and payment
* Advances / specified sums relating to immovable property
⚠️ IMPORTANT
Merely checking the cash ledger is not sufficient.
Journal entries, book adjustments, non-account-payee instruments and other non-prescribed modes should also be reviewed. The nature, amount and mode of each relevant transaction should be examined before reporting under Clause 31.
📚 Also Distinguish:
* Section 269SS – Acceptance of loans, deposits or specified sums
* Section 269T – Repayment of loans, deposits or specified advances
* Section 269ST – Receipt of ₹2,00,000 or more (separate test)
🎯 PRACTICAL TAKEAWAY
Section 269SS is not limited to simple cash transactions. A transaction-level review of the nature, amount and mode of relevant transactions is essential for proper tax-audit reporting under Clause 31
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