High Value Transactions: It is important for you to understand that the Income Tax Department does not track individual transactions of taxpayers. Instead, the department uses Annual Information Statement (AIS) and Form 26AS. Both these documents contain every transaction of taxpayers, big or small.
High Value Transactions: The season for filing Income Tax Returns (ITR) has begun. Especially after employers have issued Form 16, salaried taxpayers have also started filing returns. However, this time the deadline for filing income tax returns is 15 September. But, experts say that taxpayers should not use the last date to file returns. While filing returns, you should not try to hide any kind of income.
Income should be according to high value transactions
Experts say that the Income Tax Department keeps track of every financial transaction of taxpayers. It especially keeps an eye on high value transactions. This means that if a person makes high value transactions but shows his income to be very low in the income tax return, then he is sure to come under the radar of the Income Tax Department. The purpose of tracking high value transactions is to curb cases of tax evasion.
The data of deposits in the bank is kept under special scrutiny
The Income Tax Department keeps an eye on the high value transactions of taxpayers with the data received from banks and financial institutions. Vivek Jalan, partner of Tax Connect Advisory Services LLP, said that as per the rules, it is necessary for banks and other financial institutions to give information about many types of transactions to the Income Tax Department. For example, if a person deposits more than Rs 10 lakh in savings accounts in a financial year, then the bank has to give its information to the Income Tax Department.
Income Tax Department also becomes alert on withdrawing more money
If a person withdraws or deposits more than Rs 50 lakh from the current account, then the bank will have to give its information to the Income Tax Department. If a person pays a credit card bill of Rs 10 lakh (excluding cash) in a financial year, then the bank issuing the credit card will give its information to the Income Tax Department. If Rs 2 lakh comes into your account from the sale of goods or services, then the department will get its information.
These are the biggest weapons of the Income Tax Department
It is important for you to understand that the Income Tax Department does not track the different transactions of taxpayers. Instead, the department uses Annual Information Statement (AIS) and Form 26 AS. Both these documents include every transaction of the taxpayers, big or small. For example, if you have bought or sold shares, then its information will be in it. If you have traded in the stock markets then information about this will also be there in it.
