Unexplained money

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Guest

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22 November 2013 basic exemption limit rs.200000 is considered as unexplained money under income tax act

Nikhil Kaushik

Nikhil Kaushik (Expert)
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22 November 2013 no...not at all.

Guest

Guest (Querist)

22 November 2013 thanks

sir any case law in the above query

Nikhil Kaushik

Nikhil Kaushik (Expert)
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22 November 2013 you will rarely find a case law for someone earning less than Rs 200000 as such cases wont go to ITAT, HC level as the cost of litigation will be way more than the whole income.

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Guest

Guest (Querist)

22 November 2013 ok sir

pls detail explain why basic exemption is not come under undisclose money us.69

Guest

Guest (Querist)

22 November 2013 my freind is machanic in pvt show room and he earned rs.2 lakh p.a but his owner not give the salary certificate. so his income shown in return without proof ? and that income considered as unexplained money

Nikhil Kaushik

Nikhil Kaushik (Expert)
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22 November 2013 Let me correct myself here. The position I gave before was true till 31 March 2013.

After 1 April 2013, any unexplained income shall be taxable at 30% without any exemption/deduction.

However, in your case, absence of salary certificate doesn't make this income unexplained. Your friend can very well justify that such income was derived from working in a workshop.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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22 November 2013 It has been specifically provided under sec 69 by finance act 2012 that no exp or any deduction allowed for such income discovered by ao and no explaination to satisfaction of AO is offered then it shall be chargeable to maximum marginal rate @30% + 3 % SC & HSEC.

CA LOKESH KASAT, FCA, M.Com

CA LOKESH KASAT, FCA, M.Com (Expert)
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24 November 2013 Unavailability of source will result in sec. 69. Direct your client to take a written certificate with seal and sign from employer being on safer side.

Guest

Guest (Querist)

24 November 2013 sir this is not my client problem it is every small earning pvt employees problem like machanic, building workers, tution, tailoring workers etc in urban city employer not give any proof of income.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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24 November 2013 Dear Friend, in case you are so worried, you may simply declare the said income in your tax return.

Section 69A can be invoked only if such income was not recorded in your books. So you can prefer to maintain a small notebook detailing the receipt of such income and the same can be reflected in your tax return.

that should work.

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Guest

Guest (Querist)

24 November 2013 thanks sir I asked the query for knowledge purpose

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