How to collect money on behalf of another

Tax queries 315 views 6 replies

Geetha Gupta

Accountant

325 Points Joined September 2014

Dear all,

There are two children, though majors, requiring financial help, having lost their parents due to the pandemic.

I know a number of people, who are willing to contribute but they want to put their contribution in my Bank account and are asking me to give it to the children because the children do not have a bank account in their name at the moment. Also, it may be difficult for the children to open an account in their name as they are under care of a relative abroad for the time being.

But i am not wanting to collect for the children in my bank a/c because of possible tax implications - The receipts can get taxed as my income

Can someone suggest how to go about this?

Replies (6)

Sivaramaraju G

Learner

2398 Points Joined May 2019

Do one thing get a book of receipts like vouchers book and keep it with detailed details. like from whom you got the amount and their full address and amount they gave. if you prepare books for yourself then show the same as liability.

also get self declaration from them for why they have given amount.

Geetha Gupta

Accountant

325 Points Joined September 2014

Dear Sivaramaraju,

Ok. So i will need self declaration.

Just trying out a format for the self declaration :-

I, name of the person, PAN. no _________________, resident of _______________________, am giving Rs. _____/- for the welfare of the child's name. I request you to give this amount to the name of the child at the earliest.

Or can you suggest a different format for self declaration

what other details will be required?

Regards and Thanks

Geetha

Sivaramaraju G

Learner

2398 Points Joined May 2019

Its sufficient

veerendar singh

tax consultant

3306 Points Joined October 2018

Also obtain a letter of authority from both major childs therein granting you the right to colllect money on their behalf

Geetha Gupta

Accountant

325 Points Joined September 2014

Veerendar Ji,

is this OK?

I, name of the person on whose behalf collection is done , resident of _______________________, am authorising name of the collector , PAN/Adhaar no _________________, resident of collector's residence address, to collect any sum of money for my welfare. I request name of the collector to give this amount to me at the earliest.

or any format for the authority letter from the child ?

Regards and Thanks,

Geetha