According to financial analysts, taxpayers should be wary of six types of high-value transactions, particularly those conducted in cash, because the Income Tax Department has grown increasingly cautious.
Banks, intermediaries, and other businesses must record all high-value transactions to the Internal Revenue Service, and failure to do so will result in notifications being issued. Abhishek Murali is the Chairman of the Institute of Chartered Accountants of Southern India Regional Council’s Direct Taxes Committee.
Income Tax Department will look into six different types of high-value transactions. This comprises all cash deposits totaling ten lakhs or more that are recorded by commercial and cooperative banks during the year.
Credit card cash repayments of $16,000 or more, as well as total payments of $09 lakhs or more through any channel (cash or check) for the year, shall be reported.
The department will be notified of any purchases of mutual funds, shares or debentures of ten lakhs or more made in whatever method.
Any immovable property worth $30 lakh or more must be reported to the sub-register. A time deposit of ten lakh rupees or more will also be reported for the year.
Several taxpayers failed to provide certain information to the IRS when completing their income tax returns. Mr. Abhishek explained that this frequently passed under the radar of the Income Tax Department because the information was difficult to compile on such a wide scale of taxpayers.
Taxpayers should make sure that all of their transactions are fully disclosed in their tax returns. The taxpayer must be able to show that the money spent is justified by “Taxable Source of Income.” He noted that the Income Tax has hitherto been unable to provide details on these expenditure and outflows.
Mr Karan stated that in the context of non-disclosure, the Income Tax Department will take penal action and send letters for more action against the infringing taxpayer.
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