Money transfer

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 February 2014 One of my client has approached me with a unique problem. He belongs to a village & many of his know persons (mainly petty labours & petty workers) in other cities. They dont have bank account & due to risk of losing money in travelling, on their way to home they deposit cash in his saving account & my client withdraws the same in village & distributes them at home of respective persons. In return he might be deducting nominal charges. Basically he is doing money transfer work. During last 2-3 years the turnover is approx 10 Lacs per year. Now IT Deptt has sent notice to him. Kindly advice practical way to deal with the problem.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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01 March 2014 just answering on the income tax angle, what you need to do is to maintain/create records of each and every person who gave the money and to whom you distributed the money. Further the commission/nominal charges are to be considered as Income and should be offered to tax, if any.

Querist : Anonymous

Querist : Anonymous (Querist)

01 March 2014 Thank you very much for sharing views. My query is will the IT Deptt will agree to such detail of petty workers (from whom money was received) and to whom the same was disbursed, as they are petty workers n dont hav PAN etc.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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01 March 2014 the identity of a person is not limited to PAN. You need to establish the bonafides of such persons. Now whether department accepts or not is always a subjective matter. So no one can guarantee you that it would accept or not. What you need to do is to provide as much details as possible.

Querist : Anonymous

Querist : Anonymous (Querist)

01 March 2014 Thank you very much.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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01 March 2014 you are welcome friend.....

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