Cash deposit by a senior citizen

Others 403 views 4 replies

CA Vijitha Rachankumar

CA Final

40 Points Posted on 29 November 2016

Hi all,

My grandfather is aged 85 years now and was into agriculture for almost 60+ years in his life. He has never filed ITR as all his income is agruicultural income from rural areas, and always below taxable limits. Now he has a savings of 10 lacs(cash) with him which he wants to deposit in SB a/c. Will there be any tax impliations on this deposit?

Note: He has no property or any other asset registered on his name. Earlier he had few rural agricultural lands which he had sold few years back which is also the major source of his savings. Waiting for reply...

Replies (4)

CMA Poornima Madhava

CMA

13117 Points Posted on 29 November 2016

Since you say your grandfather was into agriculture since several decades, I think depositing 10 lacs should not be a problem provided you are in a position to explain the source of funds in respect of the same, to the satisfaction of AO.

CA VIRAL SANGHVI

Finance head

681 Points Posted on 29 November 2016

See if your grand father is farmer than nothing to worry, but you have to make ready yourself regarding sources of income. If any agriculture income regarding previous year than you have to show to the AO the proof for the same. i.e. crop details with talati certificate etc.

CA Vijitha Rachankumar

CA Final

40 Points Posted on 30 November 2016

Thank you so much...

Vaishnavi Ganesh

Chartered Accountant

861 Points Posted on 01 December 2016

since the deposit is above the margin for the income tax officials to call for information and also the prescribed margin of deposit under demonetisation scheme, your grandpa will be asked to show sources for the same.

As it's from agricultural activities, the same will be exempted. However you'll need to submit evidence of having carried out agricultural activities and (that should be reasonable ) with respect to land capacity as such. Sale of agricultural land - provided you have the proof for sale and purchase of the same as well.