Hi

Greetings of the day, there are many ways of proving receipts in cash:

1. Issuing receipt of the cash amount received, for that you have to maintain receipt book.

2. Depositing all cash in to Bank A/c so the transaction are co-related by doing so.

3. Maintaining Cash Book on daily basis recording all cash receipts on daily basis.

4. Maintaining bank book.

5. Prepare rent agreement.

6. Application from tenant for his intention to have property on rent.

All such documents have legal standing so AO has no rights question source once you have shown receipts as income and accounted in books.

Thanks!!

Originally posted by : @ VaibhavJ
	Hi Greetings of the day, there are many ways of proving receipts in cash: 1. Issuing receipt of the cash amount received, for that you have to maintain receipt book. 2. Depositing all cash in to Bank A/c so the transaction are co-related by doing so. 3. Maintaining Cash Book on daily basis recording all cash receipts on daily basis. 4. Maintaining bank book. 5. Prepare rent agreement. 6. Application from tenant for his intention to have property on rent. All such documents have legal standing so AO has no rights question source once you have shown receipts as income and accounted in books.   Thanks!!

             Nice Answer Vaibhavji. I want to ask that it means he needs atleast one documentary evidence to proove his income from house property otherwise his income will not be treated as Income from House Property.

About cash receipts. These are legal. If no documentary proof is there but AO insist on it, same can be taken from tenant now. I dont think AO won't agree to it.

hi preeti,

I think there can be a way to prove that he received rent monthly & that is-:

i assume individual is subject to TAX AUDIT u/s 44AB & amount of rent exceeds Rs.1,80,000 for FY

As per section 194i "TDS on rent " -: TDS must have been deducted by payer before paying rent for the month & deposited by 7th of following month with the department.So you can prove on the basis of 

i) books maintained by payer in which TDS is credited (as TDS Payable) ,or

ii)on the basis of TDS form used for depositing TDS

(evidences can be obtained)

*Also as per section 40a(ia) where payment is made to resident in INDIA u/s 194 I ,deduction for that payment is allowed under B&P if amt of TDS is paid before relevant due date.This can also be used as evidence from books of payer.

Dear Preeti,

My understanding of tax assessments is that AO is only concerned about the source of the income.  But since the income has been disclosed by the assessee suomoto, there is nothing AO can do about this issue except for charging the declared income under the head "other income". 

This shall have an impact of the assessable income to the extent of 30% of the rent value on account disallowance of deduction under Section 24(a). 

Thus to placate the AO, as has been rightly suggested by other caclubindia members, assessee may issue rent receipts now and affix revenue stamp on each one of them to add authenticity. 

Nevertheless, there is no reason to worry.  AOs often bark against the wrong house when there is nothing else to do and such disallowances are often struck down by CIT(A).

I guess receiving monthy rental amount in cash is not illegal. If rent receipts are prepared month wise and duly signed by both owner and the tenant, it should make a proper evidence.

Dear Preethi,

There is nothing illegal in receiving rent in cash. The problem is it is without any rental receipts. I dont understand what r u trying to communicate, either the AO wants treat it as un explained cash credit u/s 68 since there are no receipts or he needs u just to prove u have received rent ony on monthly basis.

If he wants u to prove only the receipts are on monthly basis you can show respective expenses on monthly basis ie where u applied those rental income.