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CA Intermediate · Taxation · Payment of Tax

Ravi Enterprises, a registered person in Jaipur, deposits Rs 1,00,000 in its electronic cash ledger by net banking. Which statement about the electronic cash ledger is correct?

The electronic cash ledger balance can be used to pay tax, interest, penalty, fee or any other amount payable under the Act. It is a separate ledger from the credit ledger, where input tax credit sits, and deposits are available immediately.

  1. AThe amount can be used to pay tax, interest, penalty, fee or any other amount under the ActCorrect
  2. BIt can be used only to pay tax and not interest or penalty
  3. CCredit is available in it only after the monthly return is filed
  4. DThe deposit is shown in the electronic credit ledger as input tax credit

Explanation

The electronic cash ledger is credited with deposits made by a person and can be used to pay tax, interest, penalty, fees or any other amount payable under the Act. Input tax credit is held in the separate electronic credit ledger, and a deposit does not depend on return filing. Credit ledger balances cannot pay interest, penalty or fee.

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