someone told me that the amount withdrawn from the salary account is considered "spent" by income tax department and the department assumes that i have the money equal to - Money deposited by employer as salary MINUS Money withdrawn by me For example, suppose I earn 10 lakh rs from salary in a year. Further suppose I withdrew the whole amount in form of cash withdrawals / online purchasing transactions. At the end of the year, I have almost no money in my account. In this situation, if I buy a house worth rs 10 lakhs, is it illegal/unjustifiable? In other words, does the income tax department "assumes" that the withdrawn money is already "spent" by me?
Bank withdrawals affect "legal" money?
Replies (1)
No it does not mean as spent. Only source have changed. From one source it has been transformed to other source. Suppose that 10 lakhs you withdrew means either it has been used for a purpose or still you will be having cash since it is withdrawn. It is not considered as spent. If such amt is used in buying a property then that becomes an investment. Money is spent when you withdraw for your day to day personal usage. Drawings as it is said
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