ITR Deposit: Failure to Report These High Value Transactions May Give You Income Tax Notice
New Delhi: Taxpayers are required to report some high value transactions on their income tax return (RTI), failing which they may receive a tax notice from the income tax service. It should be mentioned here that the IT department receives information from several government agencies about high value transactions made by individuals. So if you don’t report these transactions in the RTI, IT can send you a notice asking for an explanation.
Here are the high value transactions your taxpayers must report in their ITRs:
Make a fixed deposit above Rs 10 lakh with cash
If you make a fixed deposit of more than Rs 10 lakh in cash, it should be reported in the RTI. The Central Commission of Direct Taxes (CBDT) has asked banks to report these individual deposits if they exceed Rs 10 lakh in value.
Make a cash deposit of over Rs 10 lakh to savings bank accounts
If the holder of a savings account deposits more than Rs 10 lakh into their account during a fiscal year, the Income Tax Service may serve an income tax notice. Therefore, deposits and withdrawals of cash from a bank account exceeding the limit of Rs 10 lakh during a financial year must be disclosed to the tax authorities. In current accounts, the ceiling is Rs 50 lakh.
Pay credit card bills with cash
Payment of a credit card bill of Rs 1 lakh or more in cash should also be reported. Additionally, if a payment of Rs 10 lakh or more is made in a fiscal year to settle credit card bills, the payment should be disclosed in the RTI.
Purchase or sale of a building
Property registration offices are required to disclose any investment or sale of real estate for an amount of Rs 30 lakh or more to the tax authorities. So, in case you buy or sell a property for more than Rs 30 lakh, you should report it to the IT department.
Cash transactions related to stocks, mutual funds, debentures and bonds
If you have made investments in mutual funds, stocks, bonds or debentures using cash, you should make sure that the value of the transaction does not exceed Rs 10 lakh. The IT department created an annual financial transaction information return (AIR) to track high value taxpayer transactions. Tax officials will collect on this basis details of unusual high value transactions during a particular fiscal year.
Foreign exchange sales / foreign exchange expenses
If you received an amount of Rs 10 lakh or more during a financial year for the sale of foreign currency, you must report it in ITR. Likewise, any credit in foreign currency, by debit card or credit card or issuance of traveller’s check, draft or other instruments, must be notified to the IT department.