People filing income tax returns are required to collate the total earnings from all the sources to come at a cumulative figure of earnings. The second step is to adjust the earnings with the available income tax deductions applicable under various sections of the Income Tax Act. People having substantial transactions via mobile wallets and other wallets remain seems in a muddle whether the amount received from a friend in e-wallet is taxable or not.
In order to identify which income is taxable under the present Income Tax Laws, a person should take due care while collating the total income. There are certain income heads, other than the salary, which are taxable, while some might be exempt from taxes. With the advent of mobile wallet, easy money transfer facilities, bank account to bank account transfer via Unified Payment Interface (UPI), individuals now have multiple methods to transfer money.
The income earned via mobile e-wallet or money received from any friend/relative in the e-wallet might be subject to the income tax rules. All such credits will be treated as gifts received if the quantum of money transferred is less than Rs 50,000, whereas the total transaction will be treated as per the prevailing income tax slabs if the amount received is more than Rs 50,000.
According to Adhil Shetty of Bank Bazaar as seen in an ET report, if the amount received in your e-wallet or the savings account are the settlements of the respective debts owed to you, then a person is not required to pay taxes on them. An individual will be required to take a written note from the debtors which can prove that the transaction has been done to offset the debts in case the Income Tax Department asks for clarification or scrutiny of a set of transactions, the report added………Read More