High Value Transaction

INTRODUCTION

The transactions incurred in high denomination are known as High Value Transactions. Taxpayers are required to keep in mind high-value transactions that they have made during the financial year while filing their income tax return.

Income Tax Department is procuring financial information from other government departments to trace all the persons who have spent huge amounts but have not filed their income tax return (ITR) or under-reported their income in spite of entering into high value transactions or not paid taxes according to the income earned. Reporting Authorities like banks, post office, Registrars are required to intimate about high value transactions to Income-tax by filing Form 61A called Statement of Financial Transaction.

The income tax department has recently launched a revised Form 26AS which is an annual tax statement that reflects details of all high-value transactions of a taxpayer.

VARIOUS HIGH VALUE TRANSACTIONS

S.No.

Nature of High Value Transactions

Amount (p.a.) more than (Rs.)

1.

Expenditure such as Domestic business class air travel; payment of educational fees/donations; purchase of jewellery, white goods, paintings, marble and electricity consumption

1,00,000

2.

Payment of Life Insurance Policy

Payment of Health Insurance Premium

50,000

20,000

3.

Hotel Spends

20,000

4.

Investment in financial securities: Investment made by a person/ an investor in a financial year for acquiring bonds, debentures, shares or mutual funds

10,00,000

5.

Credit Card bill payments in cash

1,00,000

Credit Card bill payments through Cheques/NEFT transfers etc.

10,00,000


6.


Deposit in Current Accounts: Cash deposits or withdrawals of such amounts in a financial year in one or more Current Account of a person will have to be reported by the bank to the Income Tax authorities.

50,00,000

Any cash payment of such amounts or more in a financial year for purchase of bank drafts or pre-paid instruments issued by RBI 

10,00,000

7.

Cash deposits in Banks: Cash deposits in aggregate of such amounts in a financial year in one or more accounts (other than Current Account or Time Deposit) of a person.

10,00,000

8.

Immoveable Property: The Registrar of properties will have to report purchase & sale of all immovable property of such amounts

30,00,000

9.

Sale of foreign currency: Sale of foreign currency by any person of such amounts in a financial year is to be reported to Income Tax Department.

10,00,000

 

e-Campaign for High value transaction in compliance portal

Income Tax department has formally launched compliance portal and started e-Campaign for certain tax payers. An e-mail is sent to tax payers who have not filed their income tax return or not reported high value transactions in their income tax returns. Income tax department has gathered data from various sources and based on the data, e-Campaign e-mail is sent. This compliance facility has been started from FY 2019-2020 (AY 2020-21).

  • How information is gathered by Income Tax Department for e-Campaign?
  • The prime source of collecting information is the bank account of the tax payers, as bank account of the tax payer is linked with Aadhaar.
  • Income Tax Department also collects information from Statement of financial transaction (SFT) which is submitted by various specified entities like Bank, NBFC, Recognised Stock Exchange to Income tax department.
  • Tax Deducted at source (TDS), Tax Collected at source (TCS), Foreign remittance etc. 
  • Other methods to extract information is GST, export, import, real estate transactions.
  • What is Income Tax Compliance Portal?

Income Tax compliance portal is a website where tax payer can provide response to the compliance. This is to avoid notice, scrutiny, and other actions from the income tax department.

  • How to submit response on Income Tax Compliance Portal?
  • Login: Login to the e-filing portal (https://incometaxindiaefiling.gov.in) and click on the ‘Compliance Portal’. Link is available in ‘My Account’ to navigate to Compliance portal (https://compliance.insight.gov.in).
  • View information details: Click on the ‘e-Campaign’- High Value Transaction’ tab to view information details.
  • Submit Response: Tax payer have to submit online response by selecting among the following options on Compliance Portal.
  • Following responses can be selected:
Information is correctIf the information belongs to the tax payer and is correct in all aspects, select this option.
Information is not fully correctIf information is partially correct or not up to the mark, you can select this option. You need to provide additional information such as value, information, account etc when you select this option.
Information related to other person or yearIf the given information belongs to other person or year, you can select this option. Tax payer needs to provide correct information about the person to whom the information belongs. You are required to mention your PAN, relationship detail, FY etc.
Information is duplicate and included in other displayed informationIf information is duplicate and already mentioned in any other tab, you can select this option.
Information is deniedYou can select this option if you are unaware of the given information.

Net steps after submitting response to he Income tax compliance portal

Once you submit the response on the portal, you need to take action with respect to revising income tax return. Along with revising income tax return, you need to pay self-assessment tax (if any).

In case date of revising income tax return has passed, you need to wait till the time income tax department generates demand on the portal. You need to pay tax on the generated demand to close your income tax liability.

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