- Have any questions?
NON-DECLARATION OF CERTAIN HIGH-VALUE TRANSACTIONS MAY RESULT IN AN INCOME TAX NOTICE
Multiple government entities provide information on high-value transactions conducted by people to the Department of Information Technology. If you do not declare certain transactions in your ITR, the Internal Revenue Service (IRS) may send you a notice requesting an explanation.
Taxpayers must declare some high-value transactions on their income tax return (ITR), or they risk receiving a tax notice from the Internal Revenue Service. It’s worth noting that the Department of Information Technology obtains data on high-value transactions done by individuals from a variety of government entities. If you do not declare certain transactions in your ITR, the Internal Revenue Service (IRS) may send you a notice requesting an explanation.
Here are some of the high-value transactions that you should declare on your ITR:
Cashing in a fixed deposit of more than Rs 10 lakh
If you make a cash fixed deposit of more than Rs 10 lakh, you must disclose it on your ITR. If the value of such individual deposits exceeds Rs 10 lakh, the Central Board of Direct Taxes (CBDT) has directed banks to notify them.
Read More…
[pt_view id=”baa39696xe”]
Making a cash deposit in a savings bank account of more than Rs 10 lakh
The Income Tax Department may issue an income tax notice to a savings account customer who deposits more than Rs 10 lakh in his account during a financial year. As a result, all cash deposits or withdrawals in a bank account that exceed Rs 10 lakh in a financial year must be reported to the IRS. The limit for current accounts is Rs 50 lakh.
Using cash to pay credit card debts
Making a cash payment of Rs 1 lakh or more on a credit card statement should also be disclosed. Additionally, if a payment of Rs 10 lakh or more is made to settle credit card obligations in a financial year, the amount must be mentioned in the ITR.
The purchase or selling of a moveable asset
Property registrars must report to the tax authorities any investment or sale of immovable property of Rs 30 lakh or more. So, if you are buying or selling a property worth more than Rs 30 lakh, you must disclose it to the Income Tax Department.
Cash transactions involving stocks, mutual funds, debentures, and bonds
If you used cash to invest in mutual funds, equities, bonds, or debentures, make sure the total value of the transaction does not exceed Rs 10 lakh. The Internal Revenue Service (IRS) has developed an Annual Information Return (AIR) account of financial transactions to help taxpayers track high-value transactions. On this basis, tax officials will collect information about unusually high-value transactions in a given fiscal year.
Expenses in foreign exchange/sale of foreign currency
If you received an amount of Rs 10 lakh or more for the sale of foreign currency in a financial year, you must record it in your ITR. Any foreign currency credit made using a debit or credit card, as well as the issuing of traveler’s checks, draughts, or other instruments, shall be reported to the I-T Department.