Banks have to report high value transactions.

 

Banks have to report high value transactions.

Banks need to disclose   high value transactions to the Director of Income Tax by filing Form 61A, known as Statement of Financial Transactions. The Property Registrar/Sub-registrar also report a transaction exceeding the threshold in Form 61A.

High-value cash transactions beyond a specific threshold limit are monitored by the Income Tax Department through Annual Information Report (AIR). Therefore, if they are not reported  in ITR, it  may invite a notice from the Department.

To promote voluntary compliance and avoid issuing the notice and the scrutiny of taxpayers as part of its online campaign, the IT Department has started sending e-mail and SMS alerts about the non-disclosure of high-value transactions linked to PAN.

Any transaction exceeding  Rs.10 lakhs in a savings bank account and Rs.50 lakhs in a current bank account in a financial year should be disclosed to the I-T department.

Cash deposits in FD bank account exceeding Rs.10 lakhs need to be notified. Through form 61A, a statement of financial transactions, banks are required to disclose the transactions if the total amount deposited in single or multiple fixed deposits exceeds this limit.

As regards investments in mutual funds, stocks, bonds, or debentures, cash transactions should not exceed the limit of Rs.10 lakhs in a financial year. The Annual Information Return (AIR) statement contains these details and the tax authorities trace the high-value transactions through AIR.

Credit card bill payments above  Rs.1 lakh in cash and settlements above Rs.10 lakhs in a financial year towards credit card bills should be reported to the IT Department.

Sale of foreign currency amounting to Rs.10 lakhs or more in a financial year should also be reported to the IT Department.

The sale or purchase of any immovable property exceeding Rs.30 lakhs are reported to the tax authorities by all the property registrars and sub-registrars across the country.

Interest on saving bank account and interest on  tax refunds must be reported in ITR

It is reported that some taxpayers are not reporting saving bank account interest in the ITR. Income Tax Department has started  monitoring such interest even if it may be meagre amount. Similarly, some taxpayers ignore interest in the ITR which has been granted under Section 244A by the Income Tax Department on the refund of excess income tax paid. Such interest must be reported to avoid notice from the Department.

Long term capital gain and taxation on sale of house property

If  a house property is sold after 24 months from the date of acquisition, then profit arising on such sale will be termed as long-term capital gain. Such long-term capital gain is to be indexed with the present cost index of 331, taking base index of 100 as on 1-4-2001. The indexed capital gain would be taxed at 20.8 percent.

With Regards 

Dr. N.K.Dhooper