Doubts with respect to payment of assessee

It is advisable not to follow such practice and request client to transfer tax through his own Bank Account to maintain clarity and clear picture as far as professional him self is concerned.

WEF 1 April 2010 any tax to be paid by company is to be remitted through the companies net banking account. Cheques/ cash or any other form of payment is not accepted.

Dear Dhawal,

Thank you for your opinion. the problem never arises with respect of companies. it concerns individuals, HUF and Firms. in this regard what is to be followed?

ask them to pay it directly or collect the cash or cheque remit it on behalf of them. Do not open a seperate account for this purpose. The professional would have to face unnecessary problem like providing detailed explanation to the ITO ( incase required). One or two exceptional cases is understood. Providing this as a service to all clients does not seem proper.

i had a discussion with my principal and my line of argument is that since collection of money for the purpose of paying Income tax is outside the purview of sec 2(24) and hence applicability of the Income Tax Act as such is questioned. hence it should not be an issue.

also the general practice when i checked with my friends who are working elsewhere is to collect tax amounts by way of Cash, Cheque, DD and pay it on behalf of their clients.

Hi Friendz,

I think as such it cannot be treated as income except -

Sec 68.Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year.

Even in case of individual, HUF etc. it is advisable to auditor to get crossed cheque in the name of Income Tax ...... but no cash to be collected from client for such online payment.

@ Sukruth

In whose name the said account is running...............?
 

@ mohit-

This separate account in my boss's name only.

@ Somnath-

How about DD? if we collect a demand draft, will there be a problem then also?

As far as we are provoiding proper explanations there is no problem in doing this, In the same time it is not advisable to do this practice. Geting the chqs in the name of Income tax and we can do the service of Payment etc., Not to get payment in Auditor Name and Make payment in claint Name

he can collect cash as income tax and deposit in separate  account. there is no problem for this.

@ Sukruth.

actually i could collect following information in response of your query...... 

Code of Ethics

Clause (10) - Practising member to keep moneys of his client in a separate banking account or to use such moneys for purposes for which they are intended

I don't have a detailed copy of codes of ethics.......

so i can't suggest u anything pakka .....

 but please assess this issue in respect to Service tax ......

N do one thing .... ask your principal if he can a saperete account in the name of such clint and pay the tax from that account................

becacue in net banking system anyone can no one can trace the detail of operator...........

Otherwise It would be taxed u/s 68.....  

I dont think there there will be a problem....jus as Mr.Amir said w.r.t sec no. 68, only for the  source which has no proper explanation be treated as income...but for proving it or to maintain this procedure, maintain proper records of the clients those who are depositing such amounts with proper date, deposit  mode, and get t signed....

@ anand,

Currently the procedure followed is that there is a separate account , sepaprate  vochers are mainted to prove the validity of each transactions, assessee's sign are obtianed on such vouchers alos.

@ Mr.Ganapathy

if u get crossed cheques in favour of income tax then u cant deposit it into ur account and pay the tax because the bank will not accept it . the only way you can do it is by accpeting it in your name.

@ mohit-

if you keep on opening accounts in your clients' name then there will be no end to this. it will become very impracticle. rather we ll have to advise them to remit such funds using the convnetional method of depositing cash @ counters of banks which collect such tax.