An individual transfers ₹1mn. Via cross pay cheque to me(Individual) without any bill or deal and after few days I'll return the money to that individual. How and what is required to be shown in I.T return and other legal documents I must have for this temporary transaction, Please advise ASAP.
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Tax management for 1 million rupees transfer
Replies (2)
Will be cross examined when its credited from any foreign bank!!!
Income Tax is obviously tax on INCOME. By saying this I mean that in case if you are liable to reverse the same amount then No question of Income tax as it's not your income.
Second thing if you are receiving the amount and reversing it to the same person and both the transaction are through banking channel (not bearer cheque) then you could easily get your transactions cross check in case of any dispute.
You could show this amount simply as your loan in your books which you are reversing as you don't need it anymore (purpose fulfilled).
But if you are Individual who did not file return and receiving amount in your saving account then you will receive a Notice from Income Tax Deptt. for sure. And you have to give clarification about this amount at that time.
Second thing if you are receiving the amount and reversing it to the same person and both the transaction are through banking channel (not bearer cheque) then you could easily get your transactions cross check in case of any dispute.
You could show this amount simply as your loan in your books which you are reversing as you don't need it anymore (purpose fulfilled).
But if you are Individual who did not file return and receiving amount in your saving account then you will receive a Notice from Income Tax Deptt. for sure. And you have to give clarification about this amount at that time.
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