High-value transactions that can invite income tax notice
PremiumCash transactions beyond a specific limit should be mentioned in Income Tax Returns (ITR) filing to avoid getting a notice from the Income Tax Department
High-value cash transactions beyond a specific limit are monitored by the Income Tax Department. Therefore, failing to mention such transactions in Income Tax Returns (ITR) filing may invite a notice from the authorities.
High-value cash transactions, including bank deposits, mutual fund investments, property-related transactions and share trading are under the vigil of the IT Department. If such transactions surpass the threshold limit, one should notify the I-T department to avoid getting a notice.
Also, while filing income tax return, it has been found that an earning individual commits some common mistake that can also lead to rejection of their ITR or invite an income tax notice.
In order to access the records of the individuals regarding the high-value transactions, there are certain government agencies and financial institutions with which the IT department has entered into agreements.
To promote voluntary compliance and avoid issuing the notice and the scrutiny of taxpayers as part of its online campaign, the IT Department sends e-mail and SMS alerts about the non-disclosure of high-value transactions linked to a permanent account number (PAN).
Find a list of transactions, that, if not reported in the ITR, can draw a notice from the IT Department.
Savings and current bank account deposits
Any transaction exceeding ₹10 lakh in a savings bank account and ₹50 lakh in a current bank account in a financial year should be disclosed to the I-T department.
Fixed deposits
Cash deposits in FD bank account exceeding ₹10 lakh need to be notified. By filing form 61A, a statement of financial transactions, banks will have to disclose the transactions if the total amount deposited in single or multiple fixed deposits exceeds the specified limits.
Shares, debentures, bonds and mutual funds
As far as investments in mutual funds, stocks, bonds, or debentures are concerned, cash transactions should not exceed the limit of ₹10 lakh in a financial year. The Annual Information Return (AIR) statement contains details of financial transactions, and the tax authorities trace the high-value transactions through this.
Credit cards
Credit card bill payments above ₹1 lakh in cash and settlements above ₹10 lakh in a financial year towards credit card bills should be reported to the IT Department. The Income Tax department monitors all credit card transactions, and hiding any high-value transaction linked to credit cards could attract notice.
Foreign currency
Sale of foreign currency amounting to ₹10 lakh or more in a financial year should be reported to the IT Department.
Purchase and sale of immovable property
The sale or purchase of any immovable property exceeding ₹30 lakh should be reported to the tax authorities by all the property registrars and sub-registrars across the country.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less