10 High Value Transactions Watched By Income Tax Department

By | November 30, 2016

Searching for what are the high value transactions watched by income-tax department? Before demonetization people hardly took this topic seriously as there were various loopholes to manipulate such transactions. And that was the source of generating black money in India.

But, after the implementation of demonetization of Rs 500 & Rs 1000 notes, now people started showing interest to know what are the transactions which could be monitored by IT department, so that they can aware and handle the thing better way.

In basic terms, the transactions done in high denomination is known as high value transactions. As per income tax rules in India, one should report to such transactions to IT department through Form 61A or Annual Information Return (AIR). In case there is any sort of miss match between income & spending, you will get income tax notice which may further lead to tax penalty and imprisonment.

High Value Transactions Watched By Income Tax Department

The purpose of writing this article is to share the 10 such high value transactions which one should know which should be reported to income tax department. That means, if you have any sort of plan to spend such a huge money, then be ready to file the information with necessary proofs.

  1. If you are making a term deposit more than Rs 10 lakh, not renewal case then this will be considered under this category.
  2. If you deposit cash more than rs 10 lakh in your savings bank account, that will also consider for this category. In case of payment also an annual limit of Rs 10 lakh is there to avoid high value transactions notice from It department for payment though DD, Pay Orders or Bankers Cheque.
  3. Cash deposits or withdrawals exceeding Rs 50 lakh or more in a particular financial year will be reported by the bank to the I-T authorities.
  4. Sale or purchase of immovable property for an amount exceeding Rs. 30 Lakh or above
  5. If you have a credit card and you are making payment more than Rs 2 lakh in a year or you spend in foreign currency via debit card, credit card or traveler’s cheque for amount more than Rs 10 lakh is also considered as high value transactions.
  6. In case of stock market transactions, Rs.1 Lakh or above / year for purchase of shares issued by the company, Rs.5 Lakh or above / year for buying bonds, debentures, Rs. 2 Lakh or above for investing in units of a Mutual Fund will be considered under this category.
  7. If you invest more than 1 lakh in Gold ETFs
  8. If you are a professional and receiving cash payment of Rs. 2 Lakh or more for the sale of goods or services then you h ave to file Form 61A or Annual Information Return (AIR).
  9. A cash deposit in any bank account above Rs. 2.5 Lakh after note ban i.e from 9th Nov, 2016 to 30th Dec, 2016.
  10. A cash deposit in current account above Rs 12.5 Lakh after note ban i.e from 9th Nov, 2016 to 30th Dec, 2016.

How To Track High Value Transactions?

You might be thinking that in case you do such payments or transactions, how come income tax department will aware about that? Then let me remind you that, such transactions will not be possible without providing PAN number. And once you shared your PAN number, as per transaction limit they will be reflected in your Form 26S.

Whatever cash you have deposited, that will also reflect in the income tax India official website under “Accounts with cash transactions” as per the limits of respective transactions mentioned above.

So, don’t just get scared of these measures if you know that you have zero black money. If you need to do a high value transaction, then share PAN number and keep proper justification to explain about the same while you receive a tax notice. But for others, get ready to pay income tax penalty if not able to explain from where the money has come to you.

What do you think on this topic? Did you face any sort of experiences while dealing with high value transaction amount? Share your story or any tips here by writing a simple comment below.

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