1. Introduction
High Value transactions are transactions which are incurred in high denominations. From last few years income tax department is shaking hands with all the other related Govt. departments from which it can procure financial information and trace all the persons who are spending high amount but are not filing income tax return or are not paying taxes according to income earned. The Govt. day by day is taking several measures to reduce tax evasion and for this it is adopting technology and is bringing its operation in digital mode. There are 11 transactions which are closely monitored by income tax department. For the purpose of smooth reading let us consolidate it into 5 transactions and understand.
2. High Value Transactions
| S.NO. | HIGH VALUE TRANSACTIONS | REPORTING AUTHORITY |
| (1) | Cash deposit/ Withdrawal/ Fixed deposit made in bank account of Rs.10 lakhs or more in all bank accounts and Rs.50 lacs made in all Current accounts. | Banks/Post Office |
| (2) | Time deposits made, Purchase of Debentures or bonds, investments made in shares and Mutual Funds, buy back of shares by company, purchase of foreign currency of Rs.10 lacs or more. | Bank/Post Office/ Companies/ Mutual Fund Trustee |
| (3) | Payment made from credit card of Rs.10 lacs or more against bill raised of purchases or expenses or Rs.1 lacs paid in Cash. | Banks |
| (4) | Purchase or sale of immovable property whose Stamp Duty Value is Rs.30 lacs or more. | Registrar/Sub-registrar |
| (5) | Cash received for 2 lacs or more against sale of goods or services. | Person who has received cash and is liable for audit u/s 44AB of Income-tax Act. |
3. How Income-Tax Knows About Your High-Value Transactions-
Reporting Authorities like banks, post office, Registrars, companies are required to intimate about high value transactions to Director of Income-tax (Intelligence and Criminal Investigation) by filing Form 61A called Statement of Financial Transaction. Through this form Investigation Wing of Income-tax Department comes to know about your high-value transactions and then it checks whether such person has filed return of income or not. If return is filed whether income disclosed is true and taxes have been paid correctly or not.
4. Measures Taken By Income-Tax Department– Income-tax Deptt. is actively taking measures to trace all the high value transactions:-
1) Revised Form 26AS-For this it has revised Form No. 26AS from 01st June 2020 and PART-E of Form 26AS shows information about High Value Transaction. In earlier years income-tax notices were issued on the basis of these information. In year 2018 cases for past 8 years were reopened and notices were issued u/s 148. Also notices was issued in year 2019 to persons depositing cash above 2.5lacs during demonetization.
2) Shaking Hands With Related Department For Exchange Of DATA- Income-tax Deptt. has signed MoUs with various departments as follows-
a) Memorandum of Understanding (MoU) was signed on 21st July 2020 for exchange of data between Department of Direct tax and Deptt of Indirect tax.
b) MoU was signed on 20th July 2020 for sharing of information between Central Board of Direct Taxes (CBDT) and Ministry of Micro, Small and Medium Enterprises.
c) MoU was signed on 8th July 2020 between CBDT and Securities and Exchange Board of India (SEBI) for data exchange.
3) Launched E-Campaign To Voluntary File Returns For F.Y. 2018-19– Giving one-time opportunity to person who has not filed return for F.Y.2018-19 or has filed return but is not in line with High Value transactions. CBDT has started 11 days e-campaign from 20th July and is sending E-mails /Messages to non-filers or in whose case discrepancies is noticed to voluntary file return so that they can avoid further income-tax notices and scrutiny.
4) Mandatory To File Return Of Income-Till F.Y. 2018-19 person (other than company or firm) was required to file return if income exceeds 2.5 lacs. In Budget 2019, Hon’ble Finance Minister Smt. Nirmala Sitaraman announced that from 1st April 2019 filing of Income-tax return is necessary even if your income does not exceeds 2.5 lacs and you have entered into High Value transactions i.e. deposited Rs.1 crore in current account, expended more than 2 lacs in Foreign travel or paid above 1 lacs towards electricity expenses..
5) TDS On Cash Withdrawal-From 01st June 2020 banks and post offices are required to deduct TDS if any person withdraws cash above 20 lacs or 1 crore based on their income filing status @ 5% or 2%.
5. 0ur Comments–
All the persons who does High-Value transactions are in radar of Income-tax Departments. In maximum cases income tax notices are issued based on these High Value Transactions. So you have to keep yourself informed about all these transactions and file return accordingly. Let us bring into practice to avoid cash transactions so that income-tax notices can be avoided. Govt. is fastly moving towards digitization of its entire working system and now only good tax planning can save our taxes. Let us ensure to save taxes legally.
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The above comments do not constitute professional advice. The Author can be reached at divyaagrawal203@gmail.com.
