Pay taxes on expenses incurred for marriage

In our country it is common to incur astonishing amount of expenditure at the time of marriages, both from bride’s side and also from bridegroom’s side. But are you aware of the fact, that in case you are not able to prove the source of such kind of expenditure, the income tax department can levy taxes on such expenditure. Read on:

The provision of section 69C is triggered when, an expenditure has been found to have been incurred by an assessee in any financial year and the assessee fails to explain the source of such expenditure or any part thereof, to the satisfaction of the assessing office, the assessing officer has the power to treat such unexplained expenditure as income and levy taxes on same.

Marriage expenses are most common item of such expenditure, in respect of which addition is made under section 69C in many cases. Even though, the board of direct taxes has directed the assessing officers that for ascertaining the marriage expenses and the addition to be made should be based upon normal and moderate standards. Further, there should be a definite and tangible basis for making such estimate as such a estimate by the fact-finding authorities must be satisfactory and desirable and cannot be on fictional basis or arbitrary.

In normal circumstances, even though the expenses would have been incurred from very legitimate source, it creates enormous difficulty to prove source of each and every expenditure, as we in India, gets so much involved in family functions, that we do not take these things so seriously.

Individuals in order to avoid unpleasant situation, should look to make a note of each expenditure incurred during the marriage or other big expenditiure so that right disclose could be made before the income tax department.

Some of other such expenditure, could be, holiday expenses, house construction, purchase of expensive items and others.

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