Income Tax Notice If You Don’t Report These High-Value Transactions (Full List)
India is a country with over 1.3 billion people where only 1% of the population files income tax. So it becomes imperative that government keeps on bringing stringent measures to collect as much tax possible through each means available.
According to the latest directives, taxpayers are required to report some of the high-value transactions in their income tax return (ITR), failing which they may receive a tax notice from the Income Tax Department. Worth mentioning here is that if you do not report those transactions in the ITR the I-T Department may send you a notice seeking an explanation on the same.
Here we enlist the high-value transactions which you should report in ITR:
- 1 Fixed deposit above Rs 10 lakh with cash
- 2 Making cash deposit of more than Rs 10 lakh in savings bank accounts
- 3 Paying credit card bills in cash
- 4 Purchase or sale of an immovable property
- 5 Shares, mutual funds, debentures, and bonds related cash transactions
- 6 Sale of foreign currency/ expenses in foreign exchange
Fixed deposit above Rs 10 lakh with cash
If one is making a fixed deposit of more than Rs 10 lakh in cash then he/she needs to report it in the ITR. The Central Board of Direct Taxes (CBDT) has directed banks to report such individual deposits if they exceed Rs 10 lakh in value.
Making cash deposit of more than Rs 10 lakh in savings bank accounts
If you are a savings account holder and depositing more than Rs 10 lakh in your account during a financial year then you must reveal it to the tax authorities. Notably, in current accounts, the cap is Rs 50 lakh.
Paying credit card bills in cash
If you are making credit card bill payment of Rs 1 lakh or more in cash you need to report it to the I-T Department. At the same time, if payment of Rs 10 lakh or higher is made in a financial year to settle credit card bills, the payment must be disclosed in the ITR.
Purchase or sale of an immovable property
It should be noted that the property registrars are required to reveal any investment or sale of immovable property for an amount of Rs 30 lakh or more to the tax authorities. So, if you are purchasing or selling property for more than Rs 30 lakh, then you are required to report the same to the I-T Department.
The I-T Department has created an Annual Information Return (AIR) statement of financial transactions to trace high-value transactions of taxpayers. Tax officials will gather details against unusual high-value transactions on this basis in a particular financial year. Hence, if you have made some investments in mutual funds, stocks, bonds, or debentures using cash then you must ensure that the transaction value does not exceed Rs 10 lakh.
Sale of foreign currency/ expenses in foreign exchange
If you have been benefited of an amount of Rs 10 lakh or more in a financial year for the sale of foreign currency you need to report that in ITR. At the same time, any credit in foreign currency, through a debit card or credit card or issuance of traveler’s cheque, draft, or other instruments, should also be notified to the I-T Department.