New Amendment Enforces Account Payee Cheque or Bank Draft for Repayments Over 10,000 to Curb Tax Evasion

The Income-tax (Second Amendment) Act, 1981, introduces Chapter XXB to the Income-tax Act, 1961, focusing on the mode of repayment to counteract tax evasion. It mandates that companies, including banking companies, co-operative societies, and firms, must repay deposits of ten thousand rupees or more only through an account payee cheque, bank draft, or by crediting the amount to the depositor's account. This applies to both individual and joint deposits. Exceptions are provided for repayments made before the act's enactment. The term "deposit" refers to money repayable after notice or a specified period.

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