Rahul Mehta Gandhinagar LsCandidate

Wrong advice many CAs are giving !!! The actual tax rate will be higher than 35% if deposit is above Rs 10 lakhs due to service tax applicable !!!
.
Many CAs are saying that just deposit cash a,d tax liability will be ONLY 0% to 35% !!!
.
If cash total income including cash deposited across year is below Rs 2.5 lakh , then tax payable is Rs 0
.
And if amount deposited and income is above Rs 10 lakh, then it will be about 30% on deposits after 5 lakh.
.
THEY ARE DEAD WRONG ABOUT INCOME ABOVE Rs 10 lakhs
.
They are right about tax rate on amounts below Rs 10 lakhs.
.
------
.
If total income is below Rs 10 lakhs, then one can state any source of income, such "I was running tuition classes" and get away
.
But if source of income is above Rs 10 lakhs, then one ha sto give source of income.
.
If he says source of income as tuition classes, then service tax of 17% above Rs 10 lakhs will apply , followed by late payment interest
.
If he says source of income of rent, then he has to show property and property's rent is way below Rs 10 lakhs, then a fine of 200% for mis-reporting income may apply
.
If one states income as paying guest, then service tax of 16% will apply !!
.
One one specifcies income as sale of goods, then VAT will apply. And he has to show purchase bills and sale nills. And the bills better have VAT paid !!!
.
So depending on source of income, service tax or vat will apply along with income tax !!!
.
And service tax notice may come after 4 years !!! In such case, 17% service tax, put 100% (of that 17%) penalty, plus some 18% * 4 = 72% interest (on that service) will come,. The serveice tax plus penalty plus interest will add up to almost amount deposited !!!!
.
So pls consult a good CA and also check VAT / service tax angle before making deposits.above Rs 10 lakhs.