Beware: Government keeping eye on your transactions

Posted by Namita Gad on 18 Sep, 2017
Beware: Government keeping eye on your transactions

Imagine yourself clearing your email at work and you see one from the Government’s tax watchdog, the Income Tax Department! The email notifies to submit a plethora of documents and other information. If you are one of those who has gone through this earlier, you will be able to imagine the pain of this occurrence. If you have not, you might get it anytime in the future depending on your financial dealings; so, do not be taken aback if you do. The IT Department keeps its watchful eyes open for your high value and fishy transactions. You might or might not impress your friends with your splurges; but you will definitely invite the suspicion of the IT Department.

CBDT vide notifications lists various transactions which institutions such as banks, post offices, NBFCs, mutual funds, companies and auditable persons under Income Tax Act require reporting in a prescribed form such as;

  1. Payment in cash for purchase of bank drafts/pay orders/banker’s cheque of an amount aggregating to Rs.10Lacs or more in a financial year
  2. Payments in cash for purchase of pre-paid instruments issued by Reserve Bank of India aggregating to Rs.10Lacs or more during the financial year
  3. Cash deposits in or withdrawals from one or more current accounts aggregating to Rs.50Lacs or more in a financial year
  4. Cash deposits in one or more savings accounts of a person aggregating to Rs.10Lacs or more in a financial year
  5. One or more deposits to another person’s bank account aggregating to Rs.10Lacs or more in a financial year
  6. Payments aggregating to Rs.1Lac or more in cash; or Rs.10Lacs or more by any other mode, against one or more credit cards in a financial year
  7. Acquiring bonds or debentures of a company/institution worth Rs.10Lacs or more in a financial year
  8. Investment for acquiring shares (including share application money) issued by the company; or units of one or more schemes of a Mutual Fund aggregating to Rs.10Lacs or more in a financial year
  9. Buy back of shares (other than the shares bought in the open market) aggregating to Rs.10Lacs or more in a financial year
  10. Sale of foreign currency, including against foreign exchange card or expenditure in such currency against debit/credit card or issue of travellers cheque or draft aggregating Rs.10Lacs or more
  11. Purchase or sale of immovable property aggregating to Rs.30Lacs
  12. Cash payment exceeding Rs.2Lacs for goods or services of any nature
  13. Cash deposits during the period from 09th November 2016 to 30th December 2016 aggregating to – Rs.12.5Lacs or more in one or more current account of a person; or Rs.2Lacs or more in one or more accounts (other than a current account) of a person

So, in case you receive this email from the IT Department, do not panic. Instead, take a deep breath and try to figure out the reason why you might have received the notice, make the necessary submissions and relax! The transactions mention above are not illegal unless the money involved is well accounted for and due tax is paid on the same.