Cash Deposit in Bulk

It is not an illegal, but the entire amount will be treated as income for  the year in which year it is deposited.

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Thank you sir,

How to acccount for spouse income of previous year in the current year? It has  already been declared in the previous years as and when earned. Only the cash is deposited in the current year.

if she was being assessed in previous years and paying taxes and her books of a/c maintained in past corresponds to the quantum deposited then she should sail if any notice is served upon her to explain this deposit to the satisfaction of ito.But hee now books should show it as cash at bank instead of cash in hand.One thing more if it is very huge amount and husband holds some govt.office they may smell it otherwise too.

Huge cash deposits are always doubted by IT department. Hence be ready with acceptabte,logical explanation,when quistioned.

Your spouse had not deposited her income in previous years in bank. But had she accounted for those income not deposited, in her returns for the respective previous years? If so she need not pay income tax again on those amounts. There is a law against exchange of large amounts as cash between individuals. But there is no legal limit to the amount one can deposit as cash in a bank account. Under which head your spouse is showing her income in the tax returns? If she is showing her income under the head “Other Sources”, there is no need to maintain accounts. But if she is showing under the head “Profits and gains from Business or Profession” and the gross income is above a certain amount, she will be required to maintain books of accounts. The reason is that she will be entitled to deduction of certain expenditures to compute her taxable income. Normally one does not submit bank pass-books along with the returns. The bank doesn’t suo moto send your accounts to your Income Tax Officer either. In the very unlikely event of the Income-Tax Officer asking for the passbook, you explain as you have written above. Do not worry. Both of you have good peaceful sleep.  

If the Income-Tax Officer gives you problems, contact me. I shall tell you what to do.