Bank withdrawals affect "legal" money?

Deepak Aggrawal (Others) (4 Points)

24 September 2015  

someone told me that the amount withdrawn from the salary account is considered "spent" by income tax department and the department assumes that i have the money equal to - Money deposited by employer as salary MINUS Money withdrawn by me For example, suppose I earn 10 lakh rs from salary in a year. Further suppose I withdrew the whole amount in form of cash withdrawals / online purchasing transactions. At the end of the year, I have almost no money in my account. In this situation, if I buy a house worth rs 10 lakhs, is it illegal/unjustifiable? In other words, does the income tax department "assumes" that the withdrawn money is already "spent" by me?