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KISHORE KUMAR Joshi   16 December 2023

Cash Transaction

Past 25 years Cash savings earned by tution fees income, by sewing garments, selling paintings etc saved amount of ₹13 lacs. Deposited cash in bank 13 lacs, Income tax send the query. What reply has to be given to Income tax department.


 4 Replies

SAM (LEGAL)     16 December 2023

Past 25 years do you used to keep money in your home? no one can believe you. What happened to the old money then? How did you face demonetisation during that period? why you never directly deposited monthly amount in bank? why did you deposit wholesome money in bank?

T. Kalaiselvan, Advocate (Advocate)     16 December 2023

If this money was stocked in your home for the past 25 years, what made you to deposit the same suddently in the bank?

The deposit of the same without any source of income will certainly attract the sore eyes of the income tax department.

You have to give the reply explaining the circumstances under which you had acquired this huge amount and have to pay the applicable income tax for this huge amount. 

Dr. J C Vashista (Advocate )     17 December 2023

Well analysed and advised by learned experts, I appreciate and agree.

There is no need to deposit the amount with Bank at this belated stage. It will be appropriate to avoid such a situation of inviting question mark of Income Tax Department. 

Sanskriti Tiwari   17 December 2023

The Income Tax Department has the authority to inquire about sources of cash deposits to ensure that they align with declared income. Section 68 of the Income Tax Act, 1961, requires individuals to provide explanations for cash credits in their accounts. Also, the Supreme Court in the case of Sumati Dayal vs. CIT laid emphasis on the importance of providing documentary evidence to justify the source of income.

Therefore, your response to the Department should be factual, explaining the sources of your savings in line with the income you've declared. Regarding tuition fees income, you could present receipts, bank statements, or any documentation to prove this source. For income from sewing garments or selling paintings, maintaining sales records, invoices, or a ledger might be helpful to substantiate your claims.

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