Since the time for filing income tax returns is approaching, it is best to be aware of the specifics. If you neglect to disclose high-value transactions in a particular year, you may receive a notification from the authorities.
If you fail to report high-value cash transactions that are above a certain threshold in your income tax returns (ITR) filing, you will probably receive a notice from the income tax department.
The I-T Department monitors high-value cash transactions, such as share trading, mutual fund investments, bank deposits, and investments in real estate. You must alert the IT department if transaction volume exceeds the threshold limit to prevent receiving a notice.
In order to gain access to the records of the people involved in high-value transactions, the IT department has agreements in place with a number of governmental organisations and financial institutions.
The tax department sends email and SMS alerts concerning the non-disclosure of high-value transactions associated with a permanent account number as part of its e-campaign to encourage voluntary compliance and prevent issuing the notice and scrutinising taxpayers (PAN).
Here are a few transactions that, if not disclosed in the ITR, may draw attention from the I-T department.
Deposits to Savings Bank Accounts and Current Accounts
Any transaction in a savings bank account that exceeds Rs. 10 lakh within a fiscal year needs to be reported to the I-T department. The threshold limit for current accounts is also 50 lakh rupees.
Fixed deposits in banks
Any cash deposits into bank FD accounts that exceed 10 lakh must be reported to the I-T division. If the total amount placed in one or more fixed deposits exceeds the defined limits, the bank must declare the transactions by completing form 61A, a statement of financial transactions.
Credit Cards Bills
Cash payments made for credit card bills over one lakh rupees should be notified to the I-T department. Any high-value credit card purchase that is concealed could result in detection by the Income Tax department, which keeps track of all credit card transactions. Settlements for credit card debt that is over 10 lakh in a fiscal year must be reported in the ITR.
Sale or purchase of immovable property
All the property registrars and sub-registrars across the country are mandated to inform the tax authorities about the sale or purchase of any immovable property exceeding ₹ 30 lakh.
Shares, mutual funds, debentures and bonds
The cash transaction limit concerning investments in mutual funds, stocks, bonds, or debentures should not exceed ₹ 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. Part E of your Form 26AS contains all details of high-value transactions.
