Cash related
This query is : Resolved
03 July 2012
Mr. x (individual) can give "CASH" rs. 250000 to Mr. Y (individual) for his business purpose? for safer side Mr X. prepared agreement as proof. Mr. x is filling Income tax return. weather any problem will arise due to cash given by MR. X under Income Tax Act? and is agreement valid Proof? Both assessee are not cover under 44AB (Tax audit).
04 July 2012
1(a) If this transaction is a loan, Section 269SS will be attracted.
Section 269SS prohibits acceptance of loan in cash in excess of Rs. 20,000.
Accordingly penalty equivalent to the amount of loan shall be levied on Mr. Y.
1(b) Further, if Mr. X is not able to substantiate the source of such loan, it will be treated as undisclosed income and tax & penalty shall be levied on such amount.
2(a) If, on the other hand, this amount is given as gift, there is no taxability in the hands of Mr. X.
However, point 1(b) will still be applicable.
2(b) In the hands of Mr. Y the gift shall be exempt if Mr. X is a relative of his.
If Mr. X is not his relative, then the amount shall be taxable.
Section 269SS prohibits acceptance of loan in cash in excess of Rs. 20,000.
Accordingly penalty equivalent to the amount of loan shall be levied on Mr. Y.
1(b) Further, if Mr. X is not able to substantiate the source of such loan, it will be treated as undisclosed income and tax & penalty shall be levied on such amount.
2(a) If, on the other hand, this amount is given as gift, there is no taxability in the hands of Mr. X.
However, point 1(b) will still be applicable.
2(b) In the hands of Mr. Y the gift shall be exempt if Mr. X is a relative of his.
If Mr. X is not his relative, then the amount shall be taxable.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
