Taxpayers now need to remain mindful of the high value transactions they are making, while filing their Income Tax Return. As the Income Tax Department has become extremely vigilant about such High value Transactions, and especially of those made in cash. The Income Tax Department is informed of such transactions by the entities such as Banks, Mutual Fund Companies and Registrar of the properties, Companies issuing shares, bonds Debentures, etc. And such transactions are kept close watch by the Department, which if under-reported or not at all reported can cause trouble to the tax payers. The information about such transactions requires reporting in the ANNUAL INFORMATION RETURN (AIR). The main aim of reporting such transactions is to curb the circulation of black money. 
The Income Tax Department analyzes and scrutinizes the data in order to find out the people who have carried out the high value transactions and still haven’t filed their Income Tax return or in spite of filing the Income tax return have failed to report such transactions. From past few years, the Income Tax department has tied up with the several other Government departments from which it can procure all the financial transactions carried out by the persons who have not reported or not paid the taxes in accordance with the Income earned. 

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The following transactions if carried out in cash beyond the specified limits are considered to be the HIGH VALUE TRANSACTIONS and you may even receive notice from Income Tax Department:

CASH DEPOSITED OR WITHDRAWN FROM SAVINGS ACCOUNT


If any person deposits or withdraws cash from his Savings account of more than Rs. 10 Lakh then the Banks are required to report such transaction to the Income Tax Department as it is considered to be of High value. Such aggregate limit of Rs. 10 Lakhs is considered in aggregate for all the Savings accounts held by the person. Such limit is applicable only for the CASH Transaction and not applicable for Digital transactions made via NEFT, RTGS, IMPS etc.

CASH DEPOSITED OR WITHDRAWN FROM CURRENT ACCOUNT


If any person deposits or withdraws cash from his Current account of more than Rs. 50 Lakh then the Banks are required to report such transaction to the Income Tax Department as it is considered to be of High value. Such aggregate limit of Rs. 50 Lakhs is considered in aggregate for all the Current accounts held by the person. Such limit is applicable only for the CASH Transaction and not applicable for Digital transactions made via NEFT, RTGS, IMPS etc.

FIXED DEPOSITS IN CASH


If any person makes any Fixed Deposit in any Bank or Post Office of Rs. 10 Lakhs or more in Cash, then such transaction is categorized as High value Transaction. This is only applicable in case of a new FD made in cash for the year and the same shall not be applicable if the Old FD itself is renewed. In such case it is the responsibility of the Bank or Post office to report the same to the Income Tax Department.

CREDIT CARD BILLS


If one makes payment towards credit card Bill of an amount of Rs. 1 Lakh or more in cash during a financial year then, such a transaction shall also be regarded as High value transaction and the same shall be properly stated by the taxpayer in their Income Tax Return. In addition, such information is required to be reported by the Credit card Companies. Further, if any credit card bill is paid via NEFT, RTGS or IMPS then the same shall be regarded as High Value only if the amount exceeds Rs. 10 Lakh or more. Also, credit card transaction aggregating Rs. 2 Lakhs or above in a year is also considered to be of High level.

SALE OR PURCHASE OF IMMOVABLE PROPERTY


If a person sells or purchases any Immovable property whose Stamp Duty Value is Rs. 30 Lakhs or more, then it is the responsibility of the Registrar to report the transaction to the Department. Here what is relevant is the Circle Rate or the Stamp duty value and not the Market value. It is important to note that the cash transactions above Rs. 30 Lakhs are questionable as Income Tax Department discourages cash transactions beyond this limit in a real estate deal.

INVESTMENTS IN SHARES / MUTUAL FUND / BOND / DEBENTURES


If in a given Financial Year, a person invests Rs. 10 Lakhs or more in the shares, stocks, mutual fund, bonds or debentures of any company, be it in any form that is Cash or Digital Form, then such investment made shall be classified as High Value and the same shall be reported by the Company to the Income Tax Department.

DEMAND DRAFT OR PAY ORDER


If during a Financial year any person draws pay order or demand draft from any bank of an amount of Rs. 10 Lakhs or more in cash then, the same shall also be classified as High Value Transaction. The limit of Rs. 10 Lakhs is applicable for a single Demand draft or Pay order or in aggregate of all the Demand Drafts or pay orders drawn.

FOREIGN CURRENCY EXPENSES


If during a Financial year any person draws pay order or demand draft from any bank of an amount of Rs. 10 Lakhs or more in cash then, the same shall also be classified as High Value Transaction. The limit of Rs. 10 Lakhs is applicable for a single Demand draft or Pay order or in aggregate of all the Demand Drafts or pay orders drawn.
The slight violation in carrying on the above-mentioned transactions may result in future trouble and notice from the Department leading in further penalties and legal actions, in case such transactions are misreported, under- reported or not all disclosed by the tax payer. Form 26 AS contains all the information about such transactions as “SPECIFIED FINANCIAL TRANSACTIONS”.