The Buyt Desk
If you don’t want to face the heat of the income tax department, then be cautious of high-value transactions, especially cash transactions. The Income Tax Department is keeping a close eye on your high-value transactions. It has directed banks, intermediaries and other financial bodies to share details of all high-value transactions, and any failure in the same would attract penalties. There are six types of high-value transactions that taxpayers must be aware of to avert calling IT notice.
The Income Tax Department has created eleven categories of high-value transactions. We have simplified it to five major categories.
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All cash deposits, FD, withdrawals of 10 Lakhs or above amount in a year in commercial and Cooperative banks.
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The repayment of credit card in cash aggregating 1 Lakh or more and total of 10 Lakhs in a year made through different payment options cash, cheque and transfer.
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Buying of shares, debentures, mutual fund, foreign exchange of currency of aggregated amount 10 Lakhs or more.
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The purchase or sale of any immovable properties of 30 Lakhs or more.
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Time deposit of 10 Lakhs and more amount in a year.
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To avert receiving notice from the Income Tax department, the taxpayers must disclose all these high-value transactions in the ITR filing. Many taxpayers often do not disclose some information while filling the IT return. It often slips from the radar of the Income Tax department as it is hard to compile transaction data of such a large number of taxpayers.
How Income Tax Department Gets To Know About These Transactions
The institutions like banks, Registrar, companies, post office have been appointed as reporting authorities by the Income Tax department. These institutions will report all high-value transactions happening in their establishment to the director of Income Tax by filling the form 61 A. This form is also called the Statement of Financial Transaction. Via this form, the Income Tax Department investigation team gets to know about all high-value transactions. The department then verifies whether the taxpayer has shared details of these transactions in return on income or not. If the person has filed the return, then the disclosed income is correct or not, and the person has paid tax correctly or not.
The Income Tax Department is shaking hands with departments who could share the data of these transactions and have signed all memorandum and documents to work in coordination.
Final words – The Government of India is actively moving on digitalization and closely monitoring any malpractices followed to save tax. The taxpayer must keep themselves informed about these high-value transactions and file returns carefully to avoid facing the heat of the Income Tax Department.
