What is section 68 of Income Tax Act?

As per section 68, any sum found credited in the books of a taxpayer, for which he 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, may be charged to income-tax as the income of the taxpayer of that year.

What is unexplained cash credit?

Unexplained cash credit is any money credited to a taxpayer for which the taxpayer cannot provide any explanation about the nature or source of the money.

What is section 69 of Income-Tax Act?

Section 69 is the weapon in the armoury of the revenue department to detect the tax evasion in respect of clandestine investments made by the assessee & naturally which are not recorded in the books of accounts, if any, maintained by him.

What is tax rate for undisclosed income?

If undisclosed income is not admitted but the same is furnished in the return filed after such search, 20% of such undisclosed income is payable. In all other cases, penalty is leviable @ 60%

What is unexplained expenditure?

[Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income.] 39. Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.

Case Laws on Section 68 of Income Tax, Cash Credit – Imp Judgements of HC & SC in favour of Assessee

What is the penalty for undisclosed income?

Penalties and Prosecutions. Maximum : 300 per cent of tax leviable in respect of undisclosed income. Rs. 5,000 if return is furnished after due date specified under section 139(1).

What is deemed income?

Income which is considered to be available for use by an individual regardless of actual receipt. Income is deemed from: • parent to child; • spouse to spouse; and. •

Can you go to jail for not paying taxes in India?

Cases where the amount of tax sought to be evaded or tax on under-reported income is lesser than ₹25 lakh, the person can be punished with imprisonment of at least three months and up to two years and with fine. Tax evasion is a crime. Income Tax department has a rigorous punishment for tax evaders.

What is penalty for wrong ITR filing?

As per section 271H, where a person fails to file the statement of tax deducted/collected at source i.e. TDS/TCS return on or before the due dates prescribed in this regard, then he shall be liable to pay penalty under section 271H. Minimum penalty shall be levied of Rs. 10,000 which can go upto Rs. 1,00,000.

Is it a criminal Offence not to file a tax return?

Failing to file a tax return can be classified as a federal crime punishable as a misdemeanor or a felony. Willful failure to file a tax return is a misdemeanor pursuant to IRC 7203.

What is Section 115BAA?

Section 115BAA states that domestic companies have the option to pay tax at a rate of 22% plus sc of 10% and cess of 4%. The Effective Tax rate being 25.17% from the FY 2019-20 (AY 2020-21) onwards if such domestic companies adhere to certain conditions specified.

Who is Assessee?

Any person whose interest is being talked about is referred as assessee In simple words, if you are filing a return of any person, then that person will be called assessee by the Income Tax Department, not you.

What is section 79 of Income Tax Act?

(i) a company shall be a subsidiary of another company, if such other company holds more than half in nominal value of the equity share capital of the company; (ii) “Tribunal” shall have the meaning assigned to it in clause (90) of section 2 of the Companies Act, 2013 (18 of 2013).]

Can I deposit 30 lakhs in my account?

Answer and Explanation: Yes. The Income tax Department receives information through its AIR network , ie Annual Information Return. Hence , when Rs 30 Lakhs will be deposited…

What is the maximum amount I can maintain in savings bank without tax in India?

If a savings account holder deposits more than ₹1 lakh in one’s savings account, then the income tax department may send income tax notice. Similarly, for current account holders, the limit is ₹50 lakh and on violation of this limit may also liable for income tax notice.

Is there any limit for cash in hand?

Cash Transaction Limit – Section 269ST

Section 269ST states that no person shall receive an amount of Rs 2 Lakh or more: In aggregate from a person in a day; or. In respect of a single transaction; or. In respect of transactions relating to one event or occasion from a person.

How is tax penalty calculated?

The Failure to Pay Penalty is calculated the following way: The Failure to Pay Penalty is 0.5% of the unpaid taxes for each month or part of a month the tax balance remains unpaid. The penalty won’t exceed 25% of the taxpayer’s unpaid taxes.

What will happen if tax is not paid?

To avoid a penalty: The tax department levies heavy fines on individuals who do not file and pay their taxes. As per section 234F, a fine of Rs. 10,000 will be levied for failing to file tax returns, which is quite a heavy price to pay for an average person.

Can we change ITR form every year?

“Business owners should select the correct regime thoughtfully because once selected, it can be changed only once. However, salaried individuals with income from salary, house property and other income can change it every year.

What happens if you don’t pay taxes for 10 years?

If you continually ignore your taxes, you may have more than fees to deal with. The IRS could take action such as filing a notice of a federal tax lien (a claim to your property), actually seizing your property, making you forfeit your refund or revoking your passport.

How can I avoid paying taxes?

If you want to avoid paying taxes, you’ll need to make your tax deductions equal to or greater than your income. For example, using the case where the IRS interactive tax assistant calculated a standard tax deduction of $24,800 if you and your spouse earned $24,000 that tax year, you will pay nothing in taxes.

Can Income Tax Send me jail?

You can be sent to jail

In case you fail to file your ITR altogether, the tax department can send you a notice and it can also lead to prosecution. The jail term can range from three months to two years if you fail to file your ITR. A term varies depending on the due tax amount.

What is exempt income?

Exempt income is income that is accrued from a source that is exempt from taxation. Different types of income can be exempt, partially exempt, or non-exempt. Some examples include lottery winnings in Canada, foreign earned income, and some types of gifts.

Which income are treated as deemed income?

Section 56(2(viib) – Issue of shares by Company – deemed income. When a Company (in which public are not substantially interested) receives any consideration, from a resident, for issue of shares exceeding the fair market value (FMV) of the share, the excess amount so received will be regarded as income of the company.

What is your total income?

Your total income is your gross income from all sources less certain deductions, such as expenses, allowances and reliefs. If you are married or in a civil partnership and jointly assessed, your spouse’s or civil partner’s income is included in total income.