Income Tax Must Know
Ways through which the tax department is monitoring your high-value transactions:
1) Your bank will inform the tax department if you have deposited cash, made a demand draft or fixed deposits aggregating up to Rs 10 lakh or more in a financial year under different accounts.
2) The property registrar is liable to report purchase or sale of immovable property exceeding Rs 30 lakh.
3) Now, TCS (tax collected at source) at the rate of 1 per cent is deducted and deposited to the tax department by the buyer in case of purchase of property over Rs 50 lakh. This is just another way of reporting the transaction.
4) If you have made a cash payment of Rs 1 lakh towards your credit card or Rs 10 lakh or more through any other mode during the financial year, your credit card company will report the transactions to the tax authorities.
5) Purchase of shares, debentures and mutual funds of Rs 10 lakh or more will have to be reported by the companies to the tax authorities.
6) If you are earning more than Rs 50 lakh a year, you have to report your assets and liabilities in a new ITR (income tax return) form this year.
7) Now reporting of PAN is mandatory for making any purchase of goods and services of more than Rs 2 lakh. Also, a TCS (tax collected at source) has been introduced from June 1 in case of purchase or sale of any goods and services for Rs 2 lakh and more in cash.
8) According to experts, TDS is another way of tracking income of tax payers. Banks deduct TDS if interest income on fixed deposits is more than Rs 10,000 in a year.
9) A 1 per cent luxury tax is levied on purchase of car priced over Rs 10 lakh. It will be deducted by the seller of the car and will be applicable on ex-showroom price. However, this extra payment could be set off against the total tax liability of the buyer.
10) You also have to give your PAN for the following transactions:
a) Sale or purchase of vehicles other than two-wheelers
b) Opening a bank or a demat account; applying for credit card
c) Opening a fixed deposit of more than Rs 50,000
d) Payment of more than Rs 50,000 towards insurance premium
e) Paying more than Rs 50,000 in cash towards restaurant or hotel or foreign trip bills
f) Purchase of mutual funds, debenture, bonds worth more than Rs 50,000
g) Depositing cash or more than Rs 50,000 in bank more
1) Your bank will inform the tax department if you have deposited cash, made a demand draft or fixed deposits aggregating up to Rs 10 lakh or more in a financial year under different accounts.
2) The property registrar is liable to report purchase or sale of immovable property exceeding Rs 30 lakh.
3) Now, TCS (tax collected at source) at the rate of 1 per cent is deducted and deposited to the tax department by the buyer in case of purchase of property over Rs 50 lakh. This is just another way of reporting the transaction.
4) If you have made a cash payment of Rs 1 lakh towards your credit card or Rs 10 lakh or more through any other mode during the financial year, your credit card company will report the transactions to the tax authorities.
5) Purchase of shares, debentures and mutual funds of Rs 10 lakh or more will have to be reported by the companies to the tax authorities.
6) If you are earning more than Rs 50 lakh a year, you have to report your assets and liabilities in a new ITR (income tax return) form this year.
7) Now reporting of PAN is mandatory for making any purchase of goods and services of more than Rs 2 lakh. Also, a TCS (tax collected at source) has been introduced from June 1 in case of purchase or sale of any goods and services for Rs 2 lakh and more in cash.
8) According to experts, TDS is another way of tracking income of tax payers. Banks deduct TDS if interest income on fixed deposits is more than Rs 10,000 in a year.
9) A 1 per cent luxury tax is levied on purchase of car priced over Rs 10 lakh. It will be deducted by the seller of the car and will be applicable on ex-showroom price. However, this extra payment could be set off against the total tax liability of the buyer.
10) You also have to give your PAN for the following transactions:
a) Sale or purchase of vehicles other than two-wheelers
b) Opening a bank or a demat account; applying for credit card
c) Opening a fixed deposit of more than Rs 50,000
d) Payment of more than Rs 50,000 towards insurance premium
e) Paying more than Rs 50,000 in cash towards restaurant or hotel or foreign trip bills
f) Purchase of mutual funds, debenture, bonds worth more than Rs 50,000
g) Depositing cash or more than Rs 50,000 in bank more
Viewed by 385
View all 15 comments Below 15 comments
Sir how is the property to be treated which has been bought on EMI and registered in this financial year? more
Jul 21
Hello Naveenji, thanks for giving very good information. I have a query. I am a retired person getting pension after deduction of tax by employer. During last financial year, I taught one course in a university as guest faculty and received honorarium. 10% of that was deducted at source. 20% more I am supposed to pay now. I am a senior citizen, I understand that I am not required to pay advance tax. As I received a small amount of remuneration by teaching, do I have to pay interest ( on entire incometax or on income tax on remuneration )as I am filing my tax return now? An early reply will be highly appreciated. Thanks in advance more
Jul 18
The govt initially made an AIR system ie Annual information return 8-10 years ago in which they listed 6-7 things (1) cash deposits of over 10 lakhs in a single s/b account --The bank had to report this fact to IT dept but if you have multiple accounts it and deposited 999999 in each acct --it would not be reported by bank --it was applicable to only saving bank and not Current acct . Also cheque D/D not included (2) credit card expenditure of over 2 lakhs per year but if u multiple credit cards and spent 199999 from each card --the bank will not report to IT dept (3) Mutual fund/ Share purchase from IPO for over 2 lakhs --even if you apply for shares under retail category for 2 lakhs and its oversubscribed many times and you allotted only 5000 worth of shares you the Registrars to issue report the matter to IT Dept and you will get notice from IT dept as to your source of income (4) Purchase of RBI/Taxfree bonds over 5 lakhs (5) Purchase of immoveable property over 30 lakhs --the Registrars have to send report to IT Dept --now I believe its made 10 lakhs . Like this there were 2 more which now I dont remember. They keep adding more and more to this list for eg in this budget they included cars over 10 lakhs --in this the dealers have to add 1 % cess and deposit this money with IT dept telling your name and Pan card number --same is for purchase of high value itemslike jewellary designer hand bags TV etc for over 2 lakhs --the dealers have to report this to IT dept . Now there is proposal that you cannot make payments of over 3 lakhs by cash nor hold more than 15 lakhs cash . So if you do not want to get notice from IT dept you must keep these points in mind or be willing to tell your source of income as to how you funded the purchase . These reportings can be seen in your IT website --if any transcation has been reported there you can notice uptil 7 years more
Jul 18
