income tax return

1. HOW YOU CAN PROVE HOW YOU CAN PROVE SOURCE OF CASH SOURCE OF CASH DEPOSITS TO ESCAPE DEPOSITS TO ESCAPE INCOME TAX SCRUTINY INCOME TAX SCRUTINY? ?

2. In recent ongoing scrutiny evaluations for fiscal year 2016-17, one of the main items of verification, particularly in cases of individual citizens, has been that of the origin of money deposited by taxpayers in their own bank accounts. The reason for that is the fact that large cash deposits were produced throughout the year by many taxpayers in the time of demonetization. What's the implication if one is not able to describe such deposits? Tax is leviable on such deposits at 60%, plus surcharge and cess, together with interest at 12 percent per annum from April 2017 (which may amount to 33% till December 2019). Anyway, a penalty could be levied in 200 percent of the tax amount. Effectively, a taxpayer might wind up paying 213% of the quantity of deposit by way of penalty and taxes, besides applicable surcharge and cess. Furthermore, if the sum is large, the taxpayer faces the risk of prosecution as well, using a potential for rigorous imprisonment from three months to seven decades, as well as a good. A stiff punishment really for tax evaders. Click here income tax return If a person has deposited cash, how can one prove the source of the cash? Some taxpayers want to demonstrate the origin as being loans or gifts received by them from friends or family, some can

3. assert it to be deposited out of income, out of earlier money withdrawals or cash in hand at the beginning of the year. In cases of loans or gifts, one must prove three things in relation to such excuse --the identity of the payer, the ability of the payer to pay such amount and the genuineness of the trade. One generally obtains a confirmation from the lender or donor, confirming the loan or gift, which proves the fact of the loan or gift. The donor or lender's address and Permanent Account Number serve as evidence of his identity as well. It's also a good idea to provide copies of bank statements of the donor or lender, with explanations for important deposits, especially where the donor or lender has withdrawn cash from his bank account during the exact same period. This will demonstrate the value of this loan or gift vis- à-vis the earnings of the donor or lender. Apparently, a individual who has negligible income or assets does not possess the capacity to give a large gift or loan. The quantity of cash withdrawals during the period may also indicate the potential for the donor or lender to cover such amount in cash. Bank statements also demonstrate the genuineness of the transaction, especially if the lender or donor hasn't deposited money into these account, but has withdrawn cash from other

4. explained deposits. The genuineness of the trade may also be gauged in the confirmation, the relationship of the donor or lender to the taxpayer as well as the other circumstances surrounding the reception of the loan or gift, such as the event or cause of receipt of the amount. Read more here income tax return It also needs to be kept in mind that money loans cannot exceed $2 lakh (including sooner balance of loan, even if any) from any creditor. If a person violates this provision, one may end up paying a penalty equivalent to the sum of such loan or gift. Besides, if the gift is from a individual other than certain kinds of close relatives, then it may be taxable as regular income. In case cash is deposited out of opening balance or out of withdrawals during the year, an individual can demonstrate that by preparing a cash publication, representing the receipts and payments of cash, such as such deposit of money in bank account. Disclosure of cash in the preceding years' tax returns (in the assets and obligations schedule) is also a fantastic evidence of the opening money available together with the taxpayer. The tax and penalties on detection of such evasion of income will also be fairly steep, behaving as a significant deterrent. Maybe, once such

5. assessments are finished in December, the government should come out with the figures of the tax recovered in respect of these cash deposits. That will give citizens with evidence as to whether demonetization really served its purpose or not. Visit here income tax return