Are you one of those who love doing high-value transactions but don't bother to file their tax returns? If yes, then you have reason to worry.
Are you one of those who love doing high-value transactions but don’t bother to file their tax returns? If yes, then you have reason to worry.
For, the Income Tax (I-T) Department has identified an additional 67.54 lakh potential non-filers who have carried out high value transactions in the financial year 2014-15, but did not file return of income for the relevant assessment year, i.e. A.Y 2015-16. Probably action will be initiated against such people soon.
According to a press release issued by CBDT on Thursday, non-filers have been identified based on data analytics carried out by the Systems Directorate of the Central Board of Direct Taxes (CBDT) about whom specific information is available in the Annual Information Return (AIR), Central Information Branch (CIB) and TDS/TCS databases.
CBDT said the information relating to the identified non-filers has been made available in the ‘Compliance Module’ on the e-filing portal of the Income Tax Department. The information, however, will be visible only to the specific PAN holder when they log into the e-filing portal at https.//incometaxindiaefiling.gov.in. The PAN holder will be able to respond electronically and retain a copy of the submitted response for record purpose.
While the government urges all tax payers to disclose their true income and pay taxes accordingly, the tax department would continue to pursue the non-filers vigorously till all the high potential non-filers are covered.
According to media reports, the Income-Tax Department is closely monitoring high-value cash deposits in bank accounts and has introduced a new reporting norm for high value transactions during the period from November 9 to December 30 to change and deposit old currency notes.
In fact, in the beginning of this year itself CBDT had notified certain norms, which had made it mandatory that cash receipts and high value transactions beyond a certain threshold will have to be reported to the Income Tax authorities with effect from April 1, 2016.
Under the new norms, cash receipts, purchase of shares, mutual funds, immovable property, term deposits, and sale of foreign currency are supposed to be reported to the tax authorities in a prescribed format, which is Form 61A, according to a PTI report. For instance, while the registrar has been instructed to report purchase and sale of all immovable property exceeding Rs. 30 lakh to the I-T authorities, professionals are required to inform the tax department of receipt of cash payments exceeding Rs. 2 lakh for sale of any goods or services. Likewise, banks have been directed to report cash deposits aggregating Rs 10 lakh or more in a financial year in one or more accounts of a person.
However, issuing clarification regarding reporting of cash transactions under Rule 114 E of Income-tax Rules, 1962, CBDT on Friday (Dec 23) notified that any businesses and traders receiving cash worth more than Rs 2 lakh in any single transaction for the sale of goods and services will have to send reports of it to the authorities. The clarification on the reporting guidelines came into action from April, 2016, amid doubts about reporting of cash transactions that aggregate to Rs 2 lakh.
Whatever be the case, in view of the above, it is clear why people, especially those making high-value transactions, need to be extra careful now, and also shouldn’t avoid disclosing their income and filing their tax returns.
Here we are taking a look at who are required to file their tax return and what constitutes high-value transactions in the eyes of the tax department:
Who needs to file tax return:
According to Income Tax Act, filing of tax return is compulsory for everyone whose gross total income exceeds the basic exemption limit. Currently the basic exemption limit is Rs 2.5 lakh for individuals (both men and women) and Rs 3 lakh for senior citizens (age 60 years or more but less than 80 years). Senior citizens (age 80 years or more) have been given an exemption limit of Rs 5 lakh.
Filing of I-T return is mandatory in some other cases also, like when you want to claim an I-T refund or if you are a Resident individual and have an asset or financial interest in an entity located outside of India. You also need to file tax return if you want to carry forward a loss under a head of income.
List of high-value transactions:
1. Purchase and sale of all immovable property exceeding Rs. 30 lakh.
2. Receiving cash worth more than Rs 2 lakh in any single transaction for the sale of goods and services.
3. Cash deposits aggregating Rs 10 lakh or more in a financial year in one or more accounts of a person.
4. Credit card payments of more than Rs 2 lakh p.a.
5. Buying shares or gold ETFs worth more than Rs 1 lakh.
6. Investing Rs 5 lakh or more in RBI bonds in a year.
7. Buying MF units worth more than Rs 2 lakh.
8. Investing more than Rs 5 lakh in debentures or bonds issued by any company.
Apart from the above, in the wake of demonetization, the government has also made it mandatory to report some other transactions. It includes:
Cash deposits during the period Nov 9, 2016 to Dec 30, 2016 aggregating to:
a) Rs 12.5 lakh or more, in one or more current account of a person (or)
b) Rs 2.5 lakh or more, in one or more accounts (excluding current account) of a person.