High value transactions income tax
A summary of high-value transactions income tax
In this post, we look at the High value transactions income tax and how to Submit Response Under e-Campaign. Let’s look at each section in more detail:
- What Are High-Value Transactions?
- How does the Income tax department trace high-value transactions?
- How To Comply With e-Campaign Notice Online and How to submit Response?
- Preliminary Response
- Submit Feedback On Information In AIS
- Why is it important to submit responses in the compliance portal?
- FAQs
What Are High-Value Transactions?
High-value transactions are financial transactions that surpass a certain threshold specified by the IT department and are reported by banks and other organizations. These transactions may raise alerts for the department, resulting in inspections or tax assessments.
The Income Tax department uses Form 61A’s statement of financial transaction (SFT) or Form 61B’s reportable account to monitor major financial transactions closely. Designated entities must provide information on high-value transactions that were recorded, registered, or upheld during the fiscal year. This method allows the Income Tax Department to track individuals’ financial activities and promotes paying tax.
The following is a list of transactions that may result in a high-value transaction notice from the IT department:
- More than Rs. 10 lakh in cash deposits or withdrawals from a savings bank account in a single financial year.
- Having more than Rs. 50 lakh in cash deposits or withdrawals from a current account in a single financial year.
- A fixed deposit account receives over 10 lakh in cash in a year.
- Sales or purchases of immovable property exceed 30 lakh rupees in a single financial year.
- Cash investments of more than ten lakh rupees in a fiscal year in stocks, mutual funds, debentures, and bonds.
- In a financial year, make more than Rs. 1 lakh in cash payments on credit card bills.
- Payments for credit card debt exceeding ten lakhs in a financial year using any method other than cash.
- Foreign currency sales exceeding ten lakh rupees in a fiscal year.
How does the Income tax department trace high-value transactions?
The Income Tax Department uses a variety of ways to monitor high-value transactions successfully:
- Enhanced Form 26AS: Form 26AS has been expanded by the department to include a Specified Financial Transactions (SFT) section. They also created a new document called the Annual Information Statement (AIS), which consists of all pertinent financial information. Banks, registrars, post offices, and stock exchanges must disclose major transactions.
- TDS on Cash Withdrawals: The government has regulated that if you withdraw more than Rs.1 crore in cash from your account in a year, they will deduct 2% of it as taxes. If you haven’t told the government about your income in the last three years, you will be taxed at 2% if you take out more than Rs.20 lakhs and 5% if you take out more than Rs.1 crore.
- Mandatory Filing of ITR: If you earn more than Rs. 2.5 lakhs each year, you are required to file taxes. According to the Income Tax Department, even if you earn less, you must submit if you engage in large-scale transactions.
How To Comply With e-Campaign Notice Online and How to submit Response?
If you received an email or SMS regarding high-value transactions or non-filing of returns, you can contact the income tax department by following the steps explained below:
Step 1: Sign in to your income tax e-filing account.
Step 2: From the home page, navigate to ‘Pending Actions’ > Compliance Portal > ‘e-Campaign (AY 2021-22 Onwards)’.
After being redirected from the e-filing portal, the landing page of the e-campaign view will appear. Choose the appropriate e-campaign and click on ‘Provide feedback in AIS’.
If you do not have any active e-campaigns or e-verifications, you will get the message “No Compliance Record has been generated for you”.
For example, the following information will be displayed under the ‘e-Campaign’ list for high-value transactions or non-filing of income tax returns.
Step 4: Choose the appropriate information category. The letter ‘e’ indicates the category for which the message was received.
Step 5: Select the “Transaction” The information for which feedback is required is marked as ‘Expected’.
Step 6: Submit Response
From the options, select the most appropriate response:
- Information is correct
- Information is not fully correct
- Income is not taxable
- Information relates to other PAN/year
- Information is duplicate/included in other displayed information
- Information is denied
The following are the categories where the taxpayer’s reaction is expected under an e-campaign:
- Preliminary Response
- Feedback on Information on AIS
Preliminary Response
If you receive an income tax e-campaign notice, it will include a “Preliminary response” section where you must answer questions related to the campaign type, such as whether you filed an ITR or performed certain high-value transactions.
For example, if the campaign is about not submitting ITRs:
- Click the “Provide Response” button in the “Preliminary Response” section.
- Choose the answer from the drop-down menu.
- Provide further information based on your answer:
- Filed ITR: Add the acknowledgement number, date, filing mode (e-filed or paper), circle/ward/city, and any optional remarks.
- If you did not file an ITR, please select the reason and add any remarks.
- After providing all of the required information, submit your response. You can retrieve it later from the “Activity History” tab.
Submit Feedback On Information In AIS
If no input has previously been provided, please provide feedback on the information in the e-campaign. Focus on the L1 information, marked as ‘Expected,’ as shown in the attached screenshot.
Refer to the link: Submit feedback on information in AIS for instructions.
This process allows you to respond to the income tax department’s notice of high-value transactions or non-filing of the income tax return.
Why is it important to submit responses in the compliance portal?
The Income Tax Department monitors large cash moves to prevent anyone from illegally avoiding taxes or hiding money. To prevent issues, you must follow income tax rules when making such transactions. There is a website called the Income Tax Compliance Portal where you may manage everything online, saving you a trip to the tax office. Simply follow the instructions provided, and you will be able to finish everything without difficulty.
This concludes our blog post on high-value transactions income tax; please leave a comment if you have any further questions or concerns.
FAQs
1.How can I get into the compliance portal for high-value transactions?
Ans:To access the compliance portal for high-value transactions, follow the instructions to the Income Tax Department’s website.
2.What format should I use when providing responses in the compliance portal for high-value transactions?
Ans: The compliance site normally provides clear instructions on how to submit your responses. It may ask you to submit files or fill out forms online.
3.What happens if I don't submit a response in the compliance portal for high-value transactions?
Ans: Noncompliance with high-value transaction restrictions can have important legal and financial consequences, including fines, penalties, and damage to reputation. It is necessary to follow the regulations and respond when required.
