Income tax and legal contract


Hello!

i have 2 question with regard to Income Tax, please give your suggestion:-

1. am earning through tuition and house rent for the last few years but never filed the income tax return as payment mode was in cash and any one of the tenant needs a rent receipt for income tax purpose, now the income from both the sources are in the tune of 4-5lacs p.a. (excluding maintenance and other expenses ) so i would like to know do i need to deposit the cash in bank on a monthly basis or i can file the return without depositing the cash!

2. i have given some cash to family relation (NO LOAN) just on a relationship but now the relative wants some LOAN from me on a nominal interest rate and the amount will also cover up the cash given to him previously. To avoid better understanding the previous one was 10lacs and now he wants 10lacs more and will enter with me a legal contract of loan of 20lacs and will make the payment monthly via cheque so i want to know from you since the previous payment was in cash and the current one can be mix like cheque + cash so please suggest should i proceed or i can be in trouble with Income tax as all the 20LAcs in my saving only.


Needless to say that if i entered in to the contract then the regular ITR will follow for the financial year it belong.


thanks in advance for your reply.

 
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manager

1) Well,if earning thru tution is excluded(avoided), then rental income alone should not be more than ur exemption limit provided by govt in previous years. To that extent u need not file return and income of last few years, may be accumulated  as  cash in hand in your balance sheet.That accumulated sum may be deposited in bank any time. But this cash should be backed up by your book entries. Receipt of rent etc and details.

 

2) You  cannot give  loan in cash more than 20000  else it would attract  269 ss/tsec of IT act.  So what  ever  amount that can be banked  now, should only be given as loan and agreement should be drafted for  that only.

unexplained income would be deemed and taxed with interest , penalty u/s 271


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practicing advocate

Now also you can file ITR .

Without money lending license you cannot lend the money. 

Vishak has explained clearly.


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ADVOCATE

YOUR QUERIES: 1. am earning through tuition and house rent for the last few years but never filed the income tax return as payment mode was in cash and any one of the tenant needs a rent receipt for income tax purpose, now the income from both the sources are in the tune of 4-5lacs p.a. (excluding maintenance and other expenses ) so i would like to know do i need to deposit the cash in bank on a monthly basis or i can file the return without depositing the cash!

2. i have given some cash to family relation (NO LOAN) just on a relationship but now the relative wants some LOAN from me on a nominal interest rate and the amount will also cover up the cash given to him previously. To avoid better understanding the previous one was 10lacs and now he wants 10lacs more and will enter with me a legal contract of loan of 20lacs and will make the payment monthly via cheque so i want to know from you since the previous payment was in cash and the current one can be mix like cheque + cash so please suggest should i proceed or i can be in trouble with Income tax as all the 20LAcs in my saving only.

REPLIES: To avoid complications, better disclose both the tuition income and the house property income in your returns. You are not bound to deposit the amounts in any Bank A/c, but you may so deposit.
2. To avoid  violating Section 269SS and to avoid any penalty under Section 271D of the Income tax Act, the borrower had better take the loans from you by 'account payee cheques /drafts " only. The amount already given was in cash and it is a fait accompli. The borrower may take at least the next loan from you by account payee cheque /draft/s only. It is for the borrower to be careful, and not for you!

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Please advise if I understood all your comments well:-

1. I will disclose the Income and file the return this year onwards and will try to depositing cash in my saving account so that there is no issue as such later on.

2. the loan can be given by cheque or DD so I will give the LOAN as said and then will enter in to a LEGAL contract.


To sum up, i need to disclose the earning and then i can proceed without any hitch.


thanks once again.

if am not understood correctly, please make me correct.

 
Reply   
 
manager

 u may follow strategy as below:

1) U may take gift from the permissible relatives in a bank account (relative as per IT act brother/sister/parents/spouse etc)out of their capital via valid deed.

2) say 3-4 relatives giving 3 lac each and rest u deposit i bank making total to Rs 20 lac

3) Then give it thu cheque as loan via valid deed mentioning 20 lac but take cash back which were earlier given ,before delivering cheque.

4) Hope above would help u.

 
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Dear Sir/Madam ,

I like to ask or need expert valuable advice suggestion regarding Income tax.

1. I am working in a X construction company as a Project Incharge in Assam with CTC of Rs.50,000/- per month and payable salary of Rs.49,500/- per month (Professional Tax-Rs.500/-).

2. During my service in the company since august,2013 company credit about Rs.76,000/- ( part by part in cheque or by cash deposit) in my own SBI salary account for Site expenditure, Staff salary advance, labour payment , miscellaneous expenses etc . Now the project is cancelled by client. I have no proof of the expenditure as Accountant has left the site. Since it is not my income, how can I show this transaction( by making or fake if possible) to income tax department by CA or tax consultant  to as my own expenditure . 

 
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Dear Sir/Madam ,

I like to ask or need expert valuable advice suggestion regarding Income tax.

1. I am working in a X construction company as a Project Incharge in Assam with CTC of Rs.50,000/- per month and payable salary of Rs.49,500/- per month (Professional Tax-Rs.500/-).

2. During my service in the company since august,2013 company credit about Rs.76,000/- ( part by part in cheque or by cash deposit) in my own SBI salary account for Site expenditure, Staff salary advance, labour payment , miscellaneous expenses etc . Now the project is cancelled by client. I have no proof of the expenditure as Accountant has left the site. Since it is not my income, how can I show this transaction( by making or fake if possible) to income tax department by CA or tax consultant  to as my own expenditure . 

 
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