If you forget to specify high-value transactions in a specific year, you may receive a notification from the authorities, and with the deadline for submitting income tax returns rapidly approaching, it is advisable to be aware of the facts.
The Income Tax Department monitors high-value cash transactions over a certain threshold, and if you fail to report such transactions on your Income Tax Returns (ITR), you will most likely receive a notification.
The I-T Department monitors high-value cash transactions such as bank deposits, mutual fund investments, real estate purchases, and share trading. To avoid receiving a notification, you must notify the I-T department if your transactions exceed the threshold limit.
The I-T department has entered into arrangements with many government departments and financial institutions to gain access to individuals’ high-value transaction information.
The tax agency sends e-mail and SMS notifications concerning the non-disclosure of high-value transactions connected to a permanent account number as part of its e-campaign to promote voluntary compliance and avoid issuing notices and scrutinizing people (PAN).
Here are a few transactions that may draw the attention of the I-T department if they are not declared in the ITR.
Deposits in Savings Bank Accounts and Current Accounts
Any transaction in a savings bank account that exceeds 10 lakh in a fiscal year must be reported to the I-T department. Similarly, the threshold limit for current accounts is 50 lakh.
Bank fixed deposits
Cash deposits in bank FD accounts that surpass 10 lakh must be reported to the I-T department. If the total amount placed in single or multiple fixed deposits exceeds the stipulated restrictions, banks must declare the transactions by completing form 61A, a statement of financial activities.
Credit card statements
Credit card bill payments in cash above one lakh should be reported to the I-T department. The Income Tax Agency monitors all credit card transactions, and concealing any high-value credit card purchase may attract attention. Settlements of more than ten lakh rupees in a fiscal year for credit card debts must be reported in the ITR.
Purchase or sale of real estate
All property registrars and sub-registrars in the nation are required to notify the tax authorities of the sale or acquisition of any immovable property worth more than Rs 30 lakh.
Shares, mutual funds, debentures, and bonds are all types of investments.
In a fiscal year, the cash transaction limit for investments in mutual funds, equities, bonds, or debentures should not exceed 10 lakh.
The Annual Information Return (AIR) statement comprises financial transaction information, and the tax authorities use it to track high-value transactions. All information on high-value transactions is contained in Part E of your Form 26AS.
Foreign currency sales
Amounts of 10 lakh or more from the sale of foreign currency in a fiscal year must be declared to the Income Tax department.