News and Updates

 HIGH VALUE TRANSACTIONS

High Value Transactions in Income Tax Act, are defined as the transactions which are incurred in high denominations. There are 11 such transactions which are closely monitored by the Income Tax Department. Some of them are discussed below:

 

S.No	High Value Transaction	Reporting Authority
1.	Cash deposit/ Withdrawal/ Fixed deposit made in bank accounts of Rs.10 lakhs or more in all bank accounts and Rs.50 lacs made in all Current accounts.	Banks/Post Office
2.	Time deposits made, Purchase of Debentures or bonds, investments made in shares and Mutual Funds, buy back of shares by company, purchase of foreign currency of Rs.10 lacs or more.	Banks and Post Office                    Companies               Mutual Fund Trustee
3.	Payment made from credit card of Rs.10 lacs or more against bill raised of purchases or expenses or Rs.1 lacs paid in Cash.	Banks
4.	Purchase or sale of immovable property whose Stamp Duty Value is Rs.30 lacs or more.	Registrar                 Sub-Registrar
5.	Cash received for 2 lacs or more against sale of goods or services.	Perosn liable for audit             u/s 44AB of Income-tax.

 

• How The Income Tax Department Obtains Information About High Value Transactions?

The Income Tax Department is giving such sensitive topic the deserved attention and is therefore, collaborating with all the other related Government Departments, which will help the Department to procure the financial information and trace those persons who spends high amounts on various occasions but are not filing the Income Tax Returns or are not paying the taxes in proportions of their income earned. The Government itself has taken several measures to reduce tax evasion and hence, adopting technology to bring its operation in digital mode.

Reporting Authorities like Banks, Post Office, Registrars, and Companies are required to intimate about high value transactions to the Director of Income-tax (Intelligence and Criminal Investigation) by filing Form 61A called Statement of Financial Transaction. Through this form, the Investigation Wing of Income-tax Department comes to know about your high-value transactions and then it checks whether such person has filed Income Tax Return or not and if the return is filed then whether the income disclosed is true and taxes have been paid proportionally or not.

Certain Measures are taken by Income-Tax Department in order to keep a check on such transactions, which are as follows–

1. Revised Form 26AS

Form No. 26AS is revised with effect from 1st of June, 2020 and PART-E of Form 26AS discloses information about High Value Transactions.

2. Shaking Hands With Related Department For Exchange Of DATA

 

Income Tax Department has signed MoUs with various departments as follows-

• Memorandum of Understanding (MoU) was signed on 21st of July, 2020 for exchange of data between Department of Direct Tax and Department of Indirect Tax.
• MoU was signed on 20th of July, 2020 for sharing of information between Central Board of Direct Taxes (CBDT) and Ministry of Micro, Small and Medium Enterprises.
• MoU was signed on 8th of July, 2020 between CBDT and Securities and Exchange Board of India (SEBI) for data exchange.

3. Launched E-Campaign To Voluntary File Returns For F.Y. 2018-19

Giving a one-time opportunity to a person who has not filed a return for F.Y.2018-19 or has filed a return but is not in line with High Value Transactions. CBDT has started an 11 days e-campaign from 20th of July and is sending E-mails /Messages to non-filers or in whose case discrepancies are noticed to voluntary file return so that they can avoid further income-tax notices and scrutiny.

4. Mandatory To File Return Of Income

Till F.Y. 2018-19 person (other than company or firm) was required to file return if income exceeds 2.5 lacs. In Budget 2019, Hon’ble Finance Minister Smt. Nirmala Sitaraman announced that from 1st of April, 2019 filing of Income-Tax Return is necessary even if the income does not exceeds 2.5 lacs and have High Value Transactions i.e. deposited Rs.1 crore in current account, spent more than 2 lacs in Foreign travel or paid above 1 lacs towards electricity expenses.

5. TDS On Cash Withdrawal

From 1st of June, 2020, banks and post offices are required to deduct TDS if any person withdraws cash above 20 lacs or 1 crore based on their income filing status @ 5% or 2%.