I am a regular tax payer . i earn through my skills . i teach , i provide consultancy , i run a computer center etc etc ... i also file an income tax every year , but i never deposit money in my bank account . i use that money for expansion of my small institute , for my and my family expenses and hold some money in home and very few in my bank account .
Is it compulsion to deposit all money whatever i earned through my profession and then i should withdraw money .
while filing ITR , i have mentioned my bank account details .
Is it really necessary to use that account ? Is it necessary to deposit all amount in that account ? Is it necessary to perform transaction only from that account ?
18 September 2014
1. No it is not compulsory to keep money in bank account.
2. however, if the expenses incurred by you in cash are getting covered under 40a(3), then such expenses wont be allowed while computing tax liability
3. It is not necessary to use this account
4. Answer to other two questions have been already answered as deduction from above three numbered replies.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
18 September 2014
ok sir . really helpful suggestion .
Sir If i invest in my profession whatever i earned through my profession then that amount will be deducted from my income while computing tax on my income .
Suppose , i teach in my coaching and i earn 3 lacs from there in a year . if i invest half of the money for expansion of coaching , will this amount deducted from my income ?
18 September 2014
yes. but any expenditure made in cash in excess of Rs 20000 can be disallowed.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
18 September 2014
Sir 20000 is fixed ? If i earn in a year more than 5 or 10 lacs then will expense limit increase ? or will it be same for any size of income ?