Income Tax News: In today’s time becoming increasingly digital, it has become difficult to hide things. However, even after this, there are many efforts to hide the income, preparations are on to catch it…
More than a month has passed for the new financial year i.e. 2023-24. Along with this, the season for filing income tax returns has started gaining momentum. On the other hand, the Income Tax Department is still busy in scrutinizing the returns of previous years and is giving notices to taxpayers in case of doubt. Somewhere you should not be handed over income tax notice, to avoid this it is important to know why people are getting notices….
This arrangement has been made
The Income Tax Department works on a basic principle to catch tax evasion, which states that a person can hide his income, but cannot hide his expenses or investments. Keeping this in mind, in the last few years, the Income Tax Department has made such a system, through which the expenditure and investment of taxpayers is monitored. The name of this system is Statement of Financial Transaction ie SFT. Under this, different limits have been fixed for different types of transactions. In case of transaction exceeding this limit, the concerned unit informs the Income Tax Department.
PAN, Mobile Number and Aadhaar
Information about financial transactions from PAN, mobile number and Aadhaar also reaches the Income Tax Department, because they are used in almost every major transaction. For example, buying or selling a vehicle other than a two-wheeler attracts PAN. Similarly, PAN is required for opening a bank account or demat account, applying for a credit card. Even if your bank deposit, insurance premium, mutual fund or bond purchase, restaurant, hotel or foreign trip bill is more than Rs 50,000, then PAN has to be given. On receipt of rent from the property, the tenant has to give PAN.
TDS biggest weapon
TDS is also a way to monitor the income of taxpayers. TDS is deducted if interest exceeds Rs 40,000 in a year on bank or post office deposits. Similarly, TDS is deducted in other cases including purchase of property. Even from this, the Income Tax Department gets to know about your earnings.
This is how you get information about these cases…
- If you deposit or withdraw Rs 10 lakh or more in a cash savings account in any one financial year, then the bank informs the Income Tax Department about it. This transaction may be from one account or from more than one account. Apart from this, information is also given to make a demand draft (DD), pay order or banker’s check of Rs 10 lakh or more by giving cash.
- Information is given to the Income Tax Department on depositing or withdrawing cash of Rs 50 lakh or more in the current account.
- Information about FDs of 10 lakh or more in a financial year is also given to the tax department. This is applicable in both cash and digital cases.
- If a credit card bill of Rs 1 lakh or more is paid in cash or a bill of Rs 10 lakh or more is paid by any means, the information is given to the Income Tax Department.
- If you buy or sell a property worth Rs 30 lakh or more, then it is the job of the property registrar to inform about it. 1% TDS (deducted at source) is deducted on purchase of property above Rs 50 lakh. Due to TDS deduction, the information about the transaction also reaches the department.
- If a person buys shares, debentures, bonds or mutual funds worth Rs 10 lakh or more in a financial year, then it is the responsibility of that company or institution to inform the Income Tax Department.
- On making a cash payment of more than Rs 2 lakh for the purchase of any goods or services, the concerned seller has to give this information to the Income Tax Department.
- For example, if you buy jewelery and pay more than Rs 2 lakh in cash, then it is the responsibility of the shopkeeper to inform the department. Apart from this, you also have to provide PAN card for all transactions above Rs 2 lakh.
Must do this work before filing return
Meaning whether you want it or not, the Income Tax Department is aware of your every big transaction, but there is no need to panic, as long as you can justify your expenses and investments with earnings. If there is a difference between income and expenditure, the Income Tax Department can serve a notice. You will find the details of all the expenses and investments made in the financial year in your Annual Information Statement (AIS), which can be downloaded from the website of the Income Tax Department. AIS must be checked before filing income tax return so that there is no difference between income and expenditure or investment.
