CA Brijmohan Lavaniya
Quick Summary
Demonetization is a government policy or economic measure where a specific currency is declared invalid as legal tender, typically to curb black money, corruption, and illegal financial activities. During demonetization, people must exchange or deposit their old currency notes for new ones or face t
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FAQ :
Section 69A empowers tax authorities to treat unexplained cash deposits, bullion, jewellery, or other valuable articles not recorded in the taxpayer's books of account as undisclosed income if the taxpayer offers no satisfactory explanation for their acquisition.
Section 44AD is a presumptive business scheme that allows eligible small businesses and professionals to declare a presumed income based on a specified percentage of their total turnover, simplifying tax calculation.
If a taxpayer does not maintain books of account and has filed their income tax return under the provisions of Section 44AD, then Section 69A generally does not apply to their case.
Generally, no. If an assessment is made under Section 44AD, taxpayers are typically not obligated to explain every individual cash deposit unless it has no nexus with their gross receipts.
Favourable case laws can be valuable references for taxpayers, especially when they can demonstrate that their cash deposits are linked to legitimate business income and accounted for within the framework of their operations, particularly under schemes like Section 44AD.
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