Many people try to hide their high value transactions during annual ITR filling. While we have vast population and too many people in salaried plus business class, large number of people understate their income to save taxes. However, government has initiated many steps to clamp down such tax offenders. The tax authorities call for data from various sources such as banks, insurance companies, property registrars, stock exchanges, postal department etc. and track all high value transactions through artificial intelligence built in their system. The common high value transactions that may trigger red flag to tax authorities are below.
- High cash transaction in Bank Account – cash deposit of Rs. 10 Lakh or above in savings account, Rs. 50 Lakh or above in Current Account in a FY are considered high value transactions and may attract explanation of source of funds.
- Fixed deposit made in cash – if aggregate of all fixed deposits made in cash is of Rs. 10 Lakh or above, it may trigger an alert.
- Insurance Policy purchased in cash – if aggregate of all insurance policies made in cash is of Rs. 10 Lakh or above, you must disclose in your ITR.
- Post office Investments (NSC/ KVP/ MIS/ FD etc.) – in case you feel post office investments can be made using cash, that’s not true. If you have made such investments in cash aggregating to Rs. 10 Lakh or above in a FY, you have to declare in ITR.
- Investments in shares/ mutual funds/ debentures/ bonds made in cash – all cash transactions will attract suspicion.
- Credit card bill payment in cash – single payment of Rs. 1 Lakh or total payment of Rs. 10 Lakh and above in a FY may attract notice and explanation.
- Foreign currency transaction/ forex payment/ forex received – if total amount is Rs. 10 Lakh and above it must be mentioned in ITR filling.
- Buying & selling property – property transaction of Rs. 30/- Lakh or more have to be declared.
Therefore, you must disclose these High Value Transactions (HVT) in your annual ITR filling else you may get tax notice in future.
