How you can prove source of cash deposits to escape income tax scrutiny
If you are unable to explain such cash deposits, you may have to pay income tax as well as penalty
Some taxpayers seek to prove the source as being gifts or loans received by them from family or friends
In the recent ongoing scrutiny assessments for financial year 2016-17, one of the main items of verification, particularly in cases of individual taxpayers, has been that of the source of cash deposited by taxpayers in their bank accounts. The rationale for this is the fact that large cash deposits were made during the year by many taxpayers at the time of demonetization.