Income Tax News: The Income Tax department keeps a tight eye on high-value transactions by using the idea of a reportable account in Form 61B or a statement of financial transaction (SFT) in Form 61A, which are provided by particular organisations. Information regarding specific high-value transactions that these entities registered, documented, or kept track of during the fiscal year must be provided. This makes it possible for the Income Tax Department to monitor a person’s financial activities and make sure they are paying their taxes.
The IT Department’s Measures To Track High-Value Transactions
Upgraded Form 26AS: Form 26AS has been updated by the Department to include Specified Financial Transactions (SFT). Additionally, the “Annual Information Statement (AIS),” where all financial data is viewable, has been implemented. The income tax department must receive reports from the designated institutions—registrars, banks, post offices, stock exchanges, etc.—about transactions that surpass the designated threshold. Following that, the AIS portal displays these transactions, enabling the taxpayer to willingly divulge all information based on the AIS data.
TDS application for cash withdrawal: The government has suggested that banks deduct TDS at a rate of 2% from cash withdrawals above Rs 1 crore in the fiscal year in order to track down high-value transactions. TDS will be deducted at the rate of 2% for cash withdrawals over Rs 20 lakh and 5% for cash withdrawals exceeding Rs 1 crore if the individual has not filed an ITR for the previous three fiscal years.
Return filing is required:If an individual’s income surpasses Rs 2,50,000, they must file an ITR. However, starting on April 1, 2019, even if an individual’s income is less than Rs 2,50,000, they must file an ITR if they have engaged in certain high-value transactions. For instance, there are more than Rs. 1 crore in deposits in one or more current accounts held with a bank or cooperative bank, more than Rs. 2 lakh is spent on overseas trips, or more than Rs. 1 lakh is spent on power bills annually.
If Form 26AS Reflects SFT Transactions, What Should Be Done?
A taxpayer must first confirm that the SFT transactions listed on Form 26AS are accurate. Following that, it is the taxpayer’s responsibility to make sure that the aforementioned high-value transaction is reported on the ITR and that the tax liability associated with it has been computed correctly. An income tax notice could be issued for any mistake or discrepancy in the reporting of such transactions.
Launch Of e-Campaign
For the convenience of taxpayers, the income tax department has started an electronic campaign to encourage voluntary income tax compliance. The programme is directed towards taxpayers and assessees who are either:
- Those who failed to file their income taxes
- Possess inconsistencies or shortcomings in their returns
