Cash related

This query is : Resolved

PARTH DOSHI (Querist)
Follow

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).

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
Follow

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.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Adesh Mahajan

Sharad Jain

CMA Sajin Odupara

vinal

sunjeev batra

Subscribe Now

Cash related

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

CA Final

Accountant

Senior Executive

GST CONSULTANCY

GST CONSULTANT

Manager- Finance and Compliance