In order to avoid receiving a notice from the Income Tax Department, cash transactions that exceed a certain threshold should be disclosed in income tax returns (ITRs). The Income Tax Department keeps an eye on high-value cash transactions that go over a certain threshold. As a result, omitting to include such transactions in the filing of an Income Tax Return (ITR) may result in a notice from the authorities.
The IT Department keeps a close eye on high-value cash activities such share trading, mutual fund investments, bank deposits, and investments in real estate. To prevent receiving a warning if such transactions exceed the threshold limit, one should inform the IT department. Additionally, it has been observed that some common errors made by earners when completing their income tax returns might result in the rejection of their returns or the receipt of income tax notices.
The IT department has partnerships with specific governmental organisations and financial institutions that allow access to the records of the people involved in high-value transactions.
The IT Department provides email and SMS alerts concerning the non-disclosure of high-value transactions linked to a permanent account number in an effort to encourage voluntary compliance and prevent sending the notice and scrutinising taxpayers as part of its web campaign (PAN). Create a list of the transactions that, if not reported in the ITR, may result in an IT Department notice.
Any cash deposits into FD bank accounts that exceed Rs. 10 lakh must be reported. Banks must declare transactions if the total amount placed in a single or multiple fixed deposits exceeds the defined limitations by completing form 61A, a statement of financial transactions.
stocks, bonds, debentures, and mutual funds
Cash transactions shouldn’t go over the cap of 10 lakh in a financial year as far as investments in mutual funds, equities, bonds, or debentures are concerned. . Financial transaction information is included in the Annual Information Return (AIR) statement, which the tax authorities use to identify high-value transactions.
Bank cards
Payments made in cash for credit card bills that total more than one lakh rupees or settlements that total more than ten lakh rupees in a fiscal year should be reported to the IT Department. Any high-value credit card purchase that is concealed could result in detection by the Income Tax department, which keeps track of all credit card transactions. foreign money
Foreign currency sales worth at least Rs. 10 lakh in a fiscal year must be notified to the IT Department.
Purchase and selling of real estate
All property registrars and sub-registrars nationwide are required to notify the tax authorities of each sale or acquisition of immovable property that exceeds 30 lakh.
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