How to Maintain Safe Distance from Income Tax Department ?
ravi jain
How to Maintain Safe Distance from Income Tax Department ?
Here is a list of expenses/ investments, which may invite undue attention from the Income tax Personnel.
1) Depositing Cash aggregating to Rs.10 Lacs p.a. in your Savings Bank Account.
2) Making Credit Card Payments of more than Rs.2 Lacs p.a.
3) Investment in Mutual Fund Units worth more than Rs. 2 Lacs.
4) Investment in Debentures/ Bonds, amounting more than Rs. 5 Lacs
5) Investment in Shares worth more than Rs. 1 Lakh.
6) Investment in Gold ETF worth more than Rs. 1 Lakh.
7) Investment in RBI Bonds worth more than Rs. 5 Lacs.
8) Purchase / Sale of any Immovable Property exceeding Rs.30 Lacs.
9) Receipt of Cash Payment exceeding Rs.2 Lacs for sale of any goods/services.
10) Cash deposits or withdrawals aggregating to Rs 50 lakh or more in a financial year in one or more Current Account.
The Next question which may arise, how does the Income tax Personnel get to know about all these activities…..
To keep an eye on such high value transactions of the tax payers, the IT Department has developed a statement of financial transactions called Annual Information Report (AIR).
On the basis of this AIR, the department shortlists their targets and further sends them a notice.
What is an Annual Information Report?
Annual Information Return (AIR) of ‘high value financial transactions’ is required to be furnished under section 285 BA of the Income-tax Act, 1961 by ‘specified persons’ in respect of ‘specified transactions’ registered or recorded by them during the financial year.
Who provides the high value transaction information to prepare the AIR.
☆ Banks
☆ Mutual Fund Companies
☆ Companies Issuing Bonds/ Debentures
☆ Companies issuing shares
☆ Credit Card Companies
☆ Sub- registrar offices on real estate deals.
☆ Gold Ornament Sellers.
How High Value Transactions reported under AIR.?
The assessee can trace his/ her high value transactions reported under AIR, in their 26AS Report under AIR section. Any transaction of the assessee which has been categorized as a High Value Transaction, will be reflected therein.
How to avoid receiving a notice from the IT department?
The most important step is to file Income Tax returns on time and file them correctly.
Always re-check your Tax Credit with the 26AS statement.
Disclose all your Taxable as well as Exempt income under the right head.
