Hello. I am a salaried doctor. My employer has started to pay part of the salary in cash each month (about 1 lakh). If i deposit this amount each month into my bank account, how do i pay tax ? Can I be asked about the source of this cash deposit each month ? Due to Loan commitments, I need to deposit the amount in bank. Thanks.
Please ask your employer to pay through banking channel otherwise you both will land into trouble. At the time of scrutiny, department will ask you about the source of this cash.
Please call me for better understanding.
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Hi,
Hope you are doing well !
First try to convince your employer and get the full payment through banking channel i.e.account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account.
Otherwise, you will have to justify the source of Income and at the time of scrutiny it will create lot's of issues.
Please discuss the same with your employer.
Thanks & Regards,
Payal Chhajed
Hi,
Please ask your employer to pay you by banking channels to avoid any hassles in future. If you come under scrutiny, you will have to justify the source of income.
Regards,
Nikhil
You need to make advance tax payments by 15th of June, Sep, Dec and March. You dont need to worry about being asked, if at all, but your employer cannot claim this as business expense as it is above Rs 10000. But thats his problem. Possible that employer is using unaccounted money to make payment to you. Generally you should avoid cash receipts.
Hi
Receiving cash payments of salary is not recommended. Being a salary payment exceeding Rs. 10000, your employer would not be allowed for such salary expense also.
If your employer does not agree and cash payments are to be made, we can manage things in legal manner too.
Since it is a very obvious and genuine fact for doctors to have income in cash from practice. So, instead of showing salary by your employer, it would be sharing of professional fees. You can it under income from Business/Profession, claim 44ADA presumptive taxation where 50% of the gross receipts are presumed to be income and pay taxes accordingly.
However, you should consider depositing weekly/fortnightly depositing cash in bank accounts making the deposit amounts in lesser amounts.
We may discuss further on the issue to reach out at optimum tax solution.
Hi,
It is not advisable to go for a any legal document with employer and received the money in cash.
First try to convince your employer. Later, we'll discuss the tax treatment.
Thanks & Regards,
Payal Chhajed
Yes definitely.
You can show it under heading income from other sources.
Hello,
Yes, you can.... Just make sure you offer it to tax. You can show it as professional fees/ income received from your clients/ patients.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
Hi,
It is recommended that you don't take salary in cash. It may create issue to substantiate the source of income.
It will create issues for your employee as well.
Further, there are penalty provisions which prohibits you to accept payment in cash.
Its is never advisable to take big part of salary in cash . You will be asked for sources of Income .
It might be possible that employer is deducting TDS on Bank paid Salary only so onus to pay taxes on this part is on you now.
You can Show this as professional Income or income from other sources but again it your duty to be prepared with all Documents proving genuineness of cash receipt.
Hope it helps.
Hi,
do you have your own clinic, if yes, then you can show this as receipt from your clinic patients. and can deposit amount in small portions in your bank account. in that case you cant not show this as your salary income.
following things to be checked-
whether the portioned of your salary given in cash is being declared in form 16 and tds is being deducted, if yes, then the above treatment will result is double taxation of same income.
if it is not then you can show Rs 100000 as your practicing income and file ITR 3 or under presumptive income under Section 44ada.
for further discussion you can reach me or call me.
Payment of any income in cash is not advisable. There are stringent penalties for non-disclosure of correct income.
Once deposited in bank, the same would be taxable in your hand. As rightly mentioned by you, in case of tax scrutiny, the officer may ask to explain the source of such income.
