Have you received a notice from the income tax department? Know the reasons and possible transactions

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If a person conducts high value cash transactions, it is quite possible that they will receive a notice from the income tax department. The various transactions related to cash include banks, mutual fund companies, brokerage houses, and real estate registries. Large value transactions should always be reported to the income tax office if the value exceeds a certain threshold.

The Income Tax Department has made agreements with several government agencies to obtain the financial records of people who engage in high value transactions but do not report them on their income tax returns. Amit Gupta, MD at SAG Infotech, shares some examples of transactions due to which may have received or may receive a notice from the Income Tax Department.

Make FD bank deposits

“Cash deposits in FD bank should not exceed INR 10 lakh. A bank depositor making a cash deposit in FD bank account is advised that it should not exceed INR 10 lakh cap. The Central Commission Direct Taxes (CBDT) has announced that banks must disclose whether individual deposits exceed the prescribed limit in one or more term deposits, ”said Amit Gupta.

Make deposits to savings accounts

Further, Amit Gupta adds: “The cash deposit limit in a bank account is 10 lakh INR. If the holder of a savings account deposits more than 10 lakh INR in a fiscal year, the Income taxes may mean an income tax notice.Deposits and withdrawals from a bank account exceeding the limit of 10 lakh INR during a financial year must be disclosed to the tax authorities. In current accounts, the cap is INR 50 lakh. “

Pay credit card bills

“In accordance with the CBDT, payment of 1 lakh INR or more in cash against credit card bills should be reported. Additionally, if payment of 10 lakh INR or more is paid in a fiscal year to settle debts. credit card bills, the payment must be disclosed to the tax department. However, the main crucial concern is the income tax that applies to credit card transactions. You must verify that you do not exceed your limit of credit card spending because the tax administration keeps track of credit card transactions as your credit card details are linked to your PAN card, and so it can be easily monitored online by the government. Any large transaction must be disclosed when filing the RTI. If you are using credit cards for high value transactions, be sure to disclose on Form 26AS when filing your RTI to avoid receiving your RTI. ir an income tax notice, ”he suggested.

Purchase or sale of a building

“The registrar of properties must disclose any investment or sale of real estate in the amount of INR 30 lakh or more to the tax authorities. The transaction of purchase / sale of property must be reported on your Form No.26AS. where you are buying or selling a property for more than INR 30 lakhs, you are also on the radar of the income tax department. The income tax department can examine whether the buyer has declared the income on his or her income. tax return, ”he added.

Cash transactions related to stocks, mutual funds, debentures and bonds

Gupta says, “Some people who invest in mutual funds, stocks, bonds or debentures need to ensure that their cash transaction in these investments exceeds INR 10 lakh. The IT department created an annual financial transaction information return (AIR) to track high value taxpayer transactions. Tax officials will collate details of unusual high value transactions on this basis during a particular fiscal year. In the event that an expense or transaction has been listed as a high value transaction, check the AIR section of your Form 26AS. PART -E of Form 26AS combines details of high value financial transactions. “

Sale of currencies and foreign exchange expenses

“An amount of 10 lakh INR or more during a financial year received by any natural person for the sale of foreign currency, as well as any credit in this currency, through a debit card or card credit or traveler’s check insurance, drafts or other instruments, must be notified to the income tax department, ”concluded Amit Gupta.

(Disclaimer: The opinions / suggestions / advice expressed here in this article are solely by investment experts. Zee Business suggests that its readers consult their investment advisers before making a financial decision.)


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