Took advance of Rs 500000/ for supply of iron goods

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A GST firm proprietor received a Rs 5 lakh advance for iron goods supply, with a condition for an additional Rs 15 lakh within 30 days. The party failed to provide the balance, leading to the forfeiture of the Rs 5 lakh. The proprietor wishes to show this forfeited amount as profit in FY 2024-2025 and is seeking clarification on its income tax treatment, specifically whether it falls under the basic exemption limit given their income is below Rs 7 lakhs. They also want to know if expenses can be deducted against the forfeited amount.

ARUN GUPTA

ARUN GUPTA (Querist)
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29 March 2025 I am a proprietor of gst firm and I took advance of Rs5lakhs from a party with condition that the party will give other 15 lakhs with in 30days for supply of goods .If party fails to give the money I will forfeit Rs5 lakhs.now party failed to give balance money.I want to show 5 lakhs in profit account.how this money will be treated by income tax for taxation purpose.my basic income is less the 7 lakhs rupees.will this 5lakh rupees come under basic exemption.pl explain with details .

ARUN GUPTA

ARUN GUPTA (Querist)
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29 March 2025 The above Rs5 lakh advance was taken in fy 2021-2022 and I want to show as forfeited in fy 2024-2025.Forfeited amount will be shown as profit in fy 2024-2025.please clarify?

ARUN GUPTA

ARUN GUPTA (Querist)
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29 March 2025 Are expenses allowed as deduction against forfeited amount?