Beware: AIR transactions can put you in questions!

You may often wonder how the Income Tax Department gets details about the transactions that are done under the wraps. Though, many such financial transactions are on radar of the IT Department because it keeps a track of specified financial transactions carried on by you during the year on the basis of the information provided by certain prescribed entities in the Statement of financial transaction or reportable account u/s 285BA of the Act which was previously known as Annual Information Return. The concept of this statement was substituted from 01.04.2015. So beware, they are constantly keeping an eye on you and your transactions!

Technically, as per Section 285BA of the Act, the specified entities are required to furnish a statement of financial transaction or reportable account (statement) in respect of specified financial transactions or any reportable account registered/recorded/maintained by them during the financial year to the income-tax authority or such other prescribed authority.

All the below mentioned persons are required to furnish the statement electronically in Form No. 61A before 31st May of the next financial year in case of specified financial transactions maintained by them majorly in respect of the transactions of purchase, sale or exchange of goods or property or right or interest in a property / for rendering any service / under a works contract / an investment made or an expenditure incurred / taking or accepting any loan or deposit. The value of any transaction(s) being less than Rs. 50,000/- is not required to be reported.

List of Specified Persons and Specified Financial Transactions:

 

Class of person reporting the transaction Nature and value of transaction (for the year)
A banking company or a cooperative bank (a) Cash payment for purchasing bank drafts/pay orders of Rs. 10 lakh or more. (b) Cash payments of Rs. 10 lakh or more for purchasing pre-paid instruments issued by RBI. (c) Cash deposits or cash withdrawals (including through bearer’s cheque) of Rs. 50 lakh or more in or from one or more current account of a person. (d) Cash deposits of Rs. 10 lakh or more in one or more accounts (other than a current account and time deposit) of a person. (e) Cash payments of Rs. 1 lakh or more OR payment of Rs. 10 lakh or more by any other mode, against bills raised in respect of one or more credit cards.
Post Master General (a) Cash deposits of Rs. 10 lakh or more in one or more accounts (other than a current account and time deposit) of a person. (b) One or more time deposits of a person of Rs. 10 lakh or more in a financial year.
A company or institution issuing bonds or debentures. Receipt from any person of Rs. 10 lakh or more in a financial year for acquiring bonds or debentures issued by the company or institution.
A company issuing shares Receipt from any person of Rs. 10 lakh or more in a financial year for acquiring shares (including share application money) issued by the company.
A company listed on a recognized stock exchange purchasing its own securities under section 68 of the Companies Act, 2013 Buy back of shares from any person (other than the shares bought in the open market) for an amount or value aggregating to Rs. 10 lakh or more in a financial year.
A trustee of a Mutual Fund or such other person managing the affairs of the Mutual Fund Receipt from any person of Rs. 10 lakh or more in a financial year for acquiring units of one or more schemes of a Mutual Fund (other than the amount received on account of transfer from one scheme to another scheme of that Mutual Fund).
Inspector-General or Registrar or Sub-Registrar appointed under the Registration Act, 1908 Purchase or sale by any person of immovable property for an amount of Rs. 30 lakh or more or valued by the stamp valuation authority referred to in section 50C of the Act at Rs. 30 lakh or more.
Any person who is liable for audit under section 44AB of the Act. Receipt of cash payment exceeding Rs. 2 lakh for sale, by any person, of goods or services of any nature.

Thus, in case you are making a payment of Rs. 2,00,000 or more for any sale of goods or Rs. 10,00,000 or more for purchase of immoveable property or depositing cash of Rs. 10,00,000 or more in your account or any other transaction mentioned above, then the entities mentioned above will report the same to the Income Tax Department. So before entering into such a transaction, always know that the Department already has intimation and thus, do not try to hide the same from your income tax return otherwise the same shall amount to evasion of tax and a lot of penalties on you!

In case, you are still confused, we are always here to help you! Contact us at support@tax2win.in or call +91-9660996655!

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