Pawn broking business

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This discussion clarifies the tax implications for a pawn broking business. The proprietor can declare the aggregate interest earned from customers as gross income, deducting business expenses including bank interest. The bank's TDS deduction on cash transactions can be claimed against the overall tax liability when filing the Income Tax Return (ITR), with any excess leading to a refund.

MURALIDOSS

MURALIDOSS (Querist)

30 June 2023 Sir,
A person doing pawn broking shop, he accept the jewels and repledge the same in bank and withdraw the amount by cash, his turnover in bank around 43 lakhs, now the bank deduct TDS for cash transactions around 45000/- can I declare 12% interest for the 43 lakhs as Taxable income and deduct the tax and balance can get refund?

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

30 June 2023 His gross income will be aggregate interest charged to his customers. Out of which he can deduct all the expenses incurred over the business activity, including interest charged by bank.
He can claim the TCS deducted by bank against his tax liabilities, while filing ITR; balance amount can be claimed as refund.

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MURALIDOSS

MURALIDOSS (Querist)

30 June 2023 Thanks Very Much Sir.

Message likes : 1 times

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

30 June 2023 YOU ARE WELCOME.

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