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How to clear income source in front of Income tax officer


20-Feb-2023 (In Tax Law)
Dear SIr, My father is a farmer and he is saving some money every year by selling few crops and keep it for the education of my brother. He saved around 5.5 lakhs in 17 years that he deposited in his bank account when he learned about demonetization. He has a pan card attached to bank. Now what further process he should do to clear his income source in front of IT officer or will he be asked any explanation? He is 62 year old man. What should we do now to explain these things? Will the tax officer understand this 17 yrs saving value? My father is not much educated and so he was not believing in saving money in bank. Now its a big headache for me to manage the situation because we have no proof of that income of my father. Kindly suggest any way !
Answers (1)

Answer #1
819 votes
The Income-Tax Officer is duty bound to verify the authenticity of the assessee's explanation as to the sources of any funds with reference to evidence thereof and not according to his own subjective satisfaction. If the money in your father's possession represents his agricultural income of earlier years, all that you need to do is to show to the ITO records pertaining to his land holding, type of land (rainfed or irrigated), bills for purchase of seeds, fertilizers, etc., bills for sale of produce, etc., at least for the past few years..in the absence of such evidence, the ITO is expected to treat it as your father's unexplained income of the current year.

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