Deemed Income means Income which is actually not earned or received by Asseessee but Income Tax Act consider such as Income deemed to be received in India.

 

Deemed Income on basis of Certain Past allowances of Deduction but Received Subsequently

As per sec 59 of Income Tax Act where assessee had claimed any Deduction or allowance in any previous years but in current financial year Asseessee Received any amount of allowance or Deduction  shall be deemed to be Income of Asseessee under Head Income from Other Sources in Current Financial Year. Where Assessee had incurred any liability in past but get remission of Such liability in current Financial Year shall be Deemed to be Income of Asseessee under Head Income from Other Sources in Current Financial Year.

As per Sec 59 of Income Tax Act where Asseessee had claimed any Deduction or allowance in any previous years but successor of Asseessee had received any amount of such allowances or Deduction I'm current financial year than Such allowances shall be deemed to be Income of Such successor in current financial year under Head Income from Other Sources. Where Asseessee had incurred any liability in past but successor of Asseessee get remission of such liability than such remission shall be deemed to be Income of Successor under Head Income from Other Sources in Current Financial Year.

 

Deemed Income for Non Satisfactory Explanation for Cash Credit

As per Sec 68 of Income Tax Act where any amount credited in the books of accounts of Asseessee for any previous years and Asseessee unable justify such transactions with proper explanation to assessing officer shall be deemed be Income of Asseessee under Head Income from Other Sources in Current Financial Year. If Assessee had recorded any purchase made by Asseessee on credit in books of accounts of any previous years fails to prove identity of Creditor than such credit purchase shall be deemed to be Income of Asseessee under Head Income from Other Sources in Current Financial Year.

 

Deemed Income on Basis of Purchase of Shares from Unexplained Source of Fund

As per sec 68 of Income Tax Act where any Company other than Company in which Public is Interested credit any sum of money against Share Application Money or Share Capital or Securities Premium or any other etc. And company fails to satisfy the assessing officer that any amount credited to asseessee is resident of India and source of fund from such shares purchase than sum Credited shall be deemed to be Income of Asseessee in whose Account money is credited under Head Income from Other Sources in Current Financial Year.

 

Deemed Income for Unexplained Investment

As per sec 69 of the income Tax Act where any Investment made by Asseessee but recorded in the books of Accounts of Asseessee fails to give proper explanation to assessing officer or assessing officer doesn't satisfied with his or her explanation than amount of Investment made shall be deemed to be Income of Asseessee under Head Income from Other Sources in the Year of Investment.

If any any deficiency in Inventory shall deemed to be Income of Asseessee under Head Income from Other Sources, not as Business Income.

 

Deemed Income for Having Possession of Unexplained Source of Money

As per sec 69A of Income Tax Act if Asseessee found owner of  Any Money, jewellery, bullion or any other valuable article which is not recorded in the books of Accounts of Asseessee and Asseessee fails to give proper explanation to assessing officer than such money, jewellery and bullion shall be deemed to be Income of Asseessee under Head Income from Other Sources in such Year.

As Per Sec 69B of Income Tax Act if Asseessee found the owner of Any Money, jewellery, bullion or any other valuable article which are recorded in the books of accounts but assessing officer reason to believe that amount recorded in the books of accounts is less than actual value and Asseessee fails to give proper explanation to assessing officer than such excess money shall be deemed to be Income of Asseessee under Head Income from Other Sources in such Financial Year.

 

Deemed Income for Unexplained Expenditure made by Asseessee

As per sec 69C of Income Tax Act if Asseessee had incurred any amount Expenditure in any financial year, fails to give proper to the assessing officer about the source of fund than such Expenditure shall be deemed to be Income of Asseessee under Head Income from Other Sources in such Financial Year. Any Expenditure which is deemed to be Income of Asseessee under Head Income from Other Sources shall not be allowed as Deduction under any Head of Income and any Source of Income.

 

Deemed Income for Borrowing or Repayment of Loan on Hundi

As Per sec 69 D of Income Tax Act if any Asseessee borrowed any amount of on Hundi and repaid such money including Interest their on otherwise than thorough Account Payee Cheque or Electronic Transfer Shall be deemed to be Income of Asseessee under Head Income from Other Sources in such Financial Year. If any borrowed on Hundi is included in the Income of Asseessee under Head Income from Other Sources at the Time of borrowing shall be included in the Income of Asseessee under Head Income from Other Sources on Repayment of Borrowing. Sec 69D of Income Tax Act shall not be applicable on Darshani Hundi Transaction.

 

Deduction from Income on Deemed Income under Sec 68 and Sec 69

No Deduction (Any Nature of Expenditure or otherwise) shall be allowed from Income which is deemed Income Under sec 68 and Sec 69 of Income Tax.

 

Set off of Loss from Income Deemed Income under Sec 688 and sec 69

No Losses from any source of Income can be set off Against Deemed Income under Sec 68 and Sec 69 of Income Tax Act.

 

Rate of Taxation on Deemed Income under Sec 68 and Sec 69

Deemed Income under Sec 68 and Sec 69 of Income Tax Act shall be chargeable to Income Tax at the Rate of 30% plus surcharge and Education Cess or Health and Education Cess) without giving benefit of Basic Exemption limit.

 

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