What is allowed 

1. Cash Payment-up to INR 10,000
2. Cash receipt- below to INR 2 Lakhs (up to 20,000 for Loan and Advance)
3. Cash Payment of Loan/advance–below 20,000

Now let’s discuss the complete provision 

1. Section 40A(3) and Section 43 – Cash Payment
2. Section 269SS and Section 269ST – Cash Receipts
3. Section 269T – Repayment of Certain Loans / Deposits

1. Section 40A(3)

Cash Payment

• Payment for any expenditure of over Rs.10,000 is made in cash, then the expenditure will be disallowed.

Exemption:

• Payment though banking channels like debit card, account transfer, cheque or demand draft, digital payments.

Section 269ST

Cash receipt limit- Receipt of cash amount of Rs 2 Lakh or more not allowed

• In aggregate from a person in a day; or
• In respect of a single transaction; or
• In respect of transactions relating to one event or occasion from a person.

Exemption:

• On cash received through an Account Payee Cheque/Draft or through a bank account/post office.
• To Government, any banking company, post office savings bank or co-operative bank.
• To such other persons or class of persons or receipts, which the Central Government may specify.

Penalty under Section 269ST

• Equal to the amount of receipt is payable.

 Section 269SS

Cash receipt limit

• Receipt of cash amount of more than Rs 20,000 not allowed from Loan/Deposit/advance

Exemption

• Up to INR 20,000
• From Government;
• From any banking company, post office saving bank or co-operative bank;
• From ny corporation established by a Central, State or Provincial Act
• From any Government company as defined in section 2(45) of the Companies Act, 2013
• From an institution, association or body or class of institutions, associations or bodies notified by Central Government in the official gazette.

• If both the person, have agricultural income and do not have any taxable income then section 269SS will not apply.

Penalty under Section 269SS

Equal to the amount of loan or deposit or specified sum accepted.

Section 269T

• Repayment of Loans / Deposits with Interest (in his name or jointly with another person)- INR 20,000 or more not allowed otherwise than by an account payee cheque or account payee bank draft
• Applicable to any branch of a banking company or a co-operative society, firm or another person

Exemption:

When the loan is repaid, or deposit taken or accepted from below mentioned person:

1. Below to INR 20,000
2. Government;
3. Any banking company, post office saving bank or co-operative bank;
4. Any corporation established by a Central, State or Provincial Act
5. Any Government company as defined sec 2(45) of the Companies Act, 2013
6. An institution, association or body or class of institutions, associations or bodies notified by Central Government in the official gazette.

Penalty under Section 269T

Equal to the amount of loan or deposit repaid is payable.

Hi,

This single question covers two questions in itself

1. Applicability of TDS on consultancy services on NRI (Bhutan Citizen)
2. Requirement of form 15ca/15cb on payment made to a resident of Bhutan.

Section 195 of the Income Tax Act, 1961 covers the TDS  provision on the payments made by an individual by way of interest or any other amount other than salary to an NRI or a foreign company and also requires the payer to furnish an undertaking in the form 15CA along with a certificate of Chartered Accountants in form 15CB.

Now let’s discuss the first issue involved in the question:

The TDS liability in India is to be decided on two levels:

• First with reference to the provision of this section of the Income Tax Act and
• Second with reference to the provision of the Tax treaty/Double Taxation Avoidance Agreement (DTAA) between India and the country of residence of the NR receiver.

Now if you refer the clause 2 of article 12 of the DTTA between the Indian Government and the Roya Government of Bhutan, it is clearly stated that

Royalties or fees for technical or professional services may also be taxed in the Contracting State i.e India, and according to the laws of that State, but if the beneficial owner of the royalties or fees for technical or professional services is a resident of the other Contracting State i.e Bhutan than the tax so charged shall not exceed 10 percent of the gross amount of the royalties or fees for technical or professional services.

Now let’s discuss the second issue involved in the question i.e requirement of form 15CA and 15CB:

Form 15CA and 15CB  are not required to be furnished for remittance in two cases:

1. if it is covered in the negative list of RBI as per rule 37BB.
2. if the remittance is made by an individual and it does not require prior approval of RBI [as per the provisions of section 5 of the Foreign Exchange Management Act, 1999 (42 of 1999) read with Schedule III to the Foreign Exchange (Current Account Transaction) Rules, 2000]

In your case, it is not covered in the negative list, hence forms 15CA and CB is required to be furnished, there is no such exemption for the country of an NRI.

Thanks.