ATM :: How to maintain safe distance from the IT Department!


Rohit | 23rd Apr 2016 | CAClubIndia.com

ATM

Do you want to keep an arm’s length distance from the Income Tax Department?

Obviously the answer is Yes!! But the question here is How!

Here is a list of expenses / investments which at any point of time performed by you may invite attention from the Income Tax Personel

  • Depositing cash aggregating to Rs. 10lacs p.a. in your savings account
  • Making credit card payments of more than Rs.2lacs p.a.
  • Investment in Mutual Funds units worth more that Rs.2lacs
  • Investment in debentures / bonds, amounting more than Rs.5lacs
  • Investment in shares worth more than Rs.1lac
  • Investment in gold ETF worth more that Rs.1lac
  • Investment in RBI bonds worth more than Rs.5lacs
  • Purchase / Sale of any immovable property exceeding Rs.30lacs
  • Receipt of cash payment exceeding Rs.2lacs for sale of any goods / services
  • Cash deposits or withdrawals aggregating to Rs.50lacs or more in a financial year in one or more current accounts

Next question which may strike us, is how does the Income Tax Personnel get to know about all these activities.

To keep an eye on such high value transactions of 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 do you mean by Annual Information Report?
AIR of high value transactions is required to be furnished under section 285BA 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

How can I trace my High Value Transactions recorded under AIR
The assesse can trace his/her high value transactions reported under AIR, in their 26AS Report under AIR section. Any transaction of the assesse which has been categorised as High Value Transaction, will be reflected therein.

In the end, one last question which everyone might have. How to avoid receiving a notice from the IT department.

  • The most important step is to file your income tax returns on time and file them correctly.
  • Always re-check you Tax Credit with 26AS statement
  • Disclose all your Taxable as well as Exempt income under the right head.

The author is a Chartered Accountant and can also be reached at rrco1905@yahoo.com

Source: http://goo.gl/kU4Gkd

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