Question

Which of the following is treated as deemed income? 1) unexplained cash credit 2) unexplained investment 3) un explained expenditure 4) all of the above

Answer 1

Explanation:

Among the various options given in question statement the correct option is the first one. A deemed income is the one that is available for use regardless of the source of that income. It means that this source has no traceability and hence this is called as unexplained income of cash credit. This income is generally considered as illegal except when it is declared by an individual officially in his income statement.

Answer 2

All of the options are treated as deemed income.

• Income which, regardless of actual receipt, is deemed to be eligible for use by an individual represents a deemed income.
• If taxpayer is found to be owner of cash in an year, it is unreported in account books. If the taxpayer gives no clarification as to the existence and source of the cash acquisition, then that money can be assumed to be the taxpayer's income for that year.
• The value of the unexplained investment shall be considered to obtain the revenue of the investor in the financial year in which the investment is represented by them.
• If, in any year, the local taxpayer has typically incurred any expenditure and does not provide any reason pertaining to expenditure origin, then such expenditure or part thereof, may be considered to be the taxpayer's deemed income for that year.