269SS, 269ST, 40A(3) and 44AB Under the 2025 Act

The withholding provisions get the attention, because they move in a visible block into sections 392 to 398. The provisions that move furthest are the ones nobody was watching.

Under the Income-tax Act, 2025, the cash limits and the tax audit trigger leave the 260s and the 40s entirely, and land in parts of the Act you would not think to open.

Where they went

• 269SS — accepting a loan, deposit or specified sum — becomes section 185(1)
• 269T — repaying one — becomes section 188(1)
• 269ST — cash receipts — becomes section 186(1)
• 269SU — prescribed electronic payment modes — becomes section 187
• 40A(3) — cash expenditure — becomes section 36(4)
• 40A(3) proviso — the goods-carriage figure — becomes section 36(6)
• 44AB — tax audit — becomes section 63(1), Table Sl. 1

Note what happens to the numbering. Section 185 in the 1961 Act is the specified-business deduction. Section 185 in the 2025 Act is the cash-loan provision. Section 188 in the Companies Act, 2013 is related-party contracts, and section 188 in the 2025 Income-tax Act is repayment of loans.

For the next few years, a bare "section 185" or "section 188" in a file is ambiguous unless the Act is named alongside it.

That is a documentation habit worth adopting now rather than after the first confused review.

The limits themselves

Read against the enacted text, the amounts carry over unchanged.

Section 185(1) — a loan, deposit or specified sum of ₹20,000 or more may not be accepted otherwise than through an account payee cheque, draft, ECS or prescribed electronic mode. The aggregate test survives: individual amounts, amounts already outstanding, or the aggregate of both.

Section 188(1) — repayment, same ₹20,000 figure, tested on the amount together with any interest payable on it.

Section 186(1) — no person shall receive ₹2,00,000 or more in aggregate from a person in a day, in respect of a single transaction, or in respect of transactions relating to one event or occasion.

Section 36(4) — where any payment, or aggregate of payments made in a day to a person, exceeds ₹10,000 and is not made through specified banking or online mode, the expenditure is not allowed.

Section 36(6) — for the purposes of s.36(4) and (5), "₹10,000" reads as "₹35,000" where the payment is for plying, hiring or leasing goods carriages.

Section 63(1) — tax audit where business turnover exceeds one crore rupees, reading as ten crore rupees where cash receipts and cash payments each do not exceed 5%; and where professional gross receipts exceed fifty lakh rupees.

Worked examples

The cash expenditure limit — s.36(4)

A client pays a supplier ₹4,000 in cash at 11am and ₹7,500 in cash at 4pm on the same day.

Two payments, neither above ₹10,000. The section tests payment or aggregate of payments made in a day to a person, so the figure is ₹11,500 and the whole of it is disallowed — not the excess over ₹10,000, the entire expenditure.

That is worth sitting with. Unlike a threshold that taxes the excess, s.36(4) disallows the payment.

The same client pays a lorry operator ₹28,000 in cash for a consignment.

Above ₹10,000, so the general limb would disallow it. But s.36(6) substitutes ₹35,000 for plying, hiring or leasing of goods carriages, and ₹28,000 is inside that. Allowed.

The receipt limit — s.186(1)

A jeweller receives ₹1,90,000 in cash from a customer on 14 May, and a further ₹40,000 from the same customer on the same day against a second bill.

₹2,30,000 in aggregate from a person in a day. The section is engaged on the first limb, and the two bills do not help — the aggregation is by person and day, not by transaction.

The same jeweller receives ₹1,80,000 in cash from that customer on 14 May and ₹1,80,000 on 15 May.

Two days, ₹1,80,000 each, neither reaching ₹2,00,000. On the first limb, not caught. But if both relate to one event or occasion — a single wedding order — the third limb aggregates them regardless of the dates, and it is engaged.

The audit trigger — s.63(1)

A trading business has turnover of ₹6.4 crore. Cash receipts are 2% of receipts; cash payments are 9% of payments.

The ten-crore limb requires cash receipts and cash payments each to be within 5%. Payments are at 9%, so the substitution does not apply, the one-crore limit governs, and the audit applies.

Both conditions have to hold. Meeting one is not partial relief.

What has not changed at all

The banking company exemption to the loan provisions is intact, and so is its limit: it exempts a banking company, and a non-banking financial company is not one. A vehicle loan from a finance company sits inside s.185 and s.188 exactly as it sat inside 269SS and 269T.

Equally, the aggregation asymmetry survives. Section 186 tests receipts from a person in a day, so consolidating two ledgers you have concluded are one person can change the answer. Sections 185 and 188 test per transaction, so consolidating cannot create or erase a breach there — only alter how the disclosure reads.

How Audcrix handles it

• The tax year selects the Act, so a FY 2026-27 register cites s.185, s.186 and s.188 while a FY 2025-26 register continues to cite 269SS, 269ST and 269T.
• Amounts come from the committed extract of the enacted text, each carrying the page and the passage it was read from, rather than from a summary.
• The register lists everything tested, not only the breaches, because a clause 31 working paper needs the population and not a verdict.
• Lender identity is resolved rather than assumed from the Tally group a loan happens to sit under.

Part three of a series working through the 1961 and 2025 provisions side by side. Part one is the section conversion table; part two works through the TDS Tables.

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