You may get a notice from the authorities, if you fail to mention high-value transactions in a particular year and with the deadline for income tax returns filing fast approaching, best to know the details.
The Income Tax Department monitors high-value cash transactions beyond a specific limit and if you fail to mention such transactions in your Income Tax Returns (ITR) filing, you are likely get a notice.
The I-T Department keeps a watch on high-value cash transactions, including bank deposits, mutual fund investments, property-related transactions and share trading. If transactions surpass the threshold limit, you must notify the I-T department to avoid getting a notice.
The I-T department has entered into agreements with several government agencies and financial institutions to access the records of the individuals regarding the high-value transactions.
As part of its e-campaign to promote voluntary compliance and avoid issuing the notice and the scrutiny of taxpayers, the tax department sends e-mail and SMS alerts about the non-disclosure of high-value transactions linked to a permanent account number (PAN).
Read here for details on individual taxpayers deadline to file income tax returns (ITR), for FY 2021-2022 by July 31, income tax slabs under the old and the new regime.
Here are a few transactions which may attract notice from the I-T department if not reported in the ITR.
Savings Bank Account and Current Account Deposits
Any transaction exceeding Rs 10 lakh in a savings bank account in a financial year should be disclosed to the I-T department. Similarly, for current accounts, the threshold limit is Rs 50 lakh.
Fixed deposits in banks
Cash deposits in bank FD account exceeding Rs 10 lakh need to be notified to the I-T department. Banks will have to disclose the transactions if the total amount deposited in single or multiple fixed deposits exceeds the specified limits by filing form 61A, a statement of financial transactions.
Credit card bills
Credit card bill payments above Rs 1 lakh in cash should be reported to the I-T department. The Income Tax department monitors all credit card transactions, and hiding any high-value transaction linked to credit cards could attract notice. Settlements above Rs 10 lakh in a financial year towards credit card bills should be disclosed 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 Rs 30 lakh.
Shares, mutual funds, debentures and bonds
The cash transaction limit concerning investments in mutual funds, stocks, bonds, or debentures should not exceed Rs 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.
Sale of foreign currency
An amount of Rs 10 lakh or more in a financial year from the sale of foreign currency should be reported to the Income Tax department.