WHICH KIND OF TRANSACTIONS ARE CONSIDERED AS HIGH VALUE TRANSACTIONS?
Nowadays, taxpayers are worried about High Value Transactions. Which kind of transactions are to be considered as high value transactions?
This year, the date of filing the return of income has been extended without asking for an extension, while every year we requested CBDT for an extension of the due date for filing the return of income. The reason for the extension of the due date for filing income tax returns is that CBDT is collecting certain details, one of them being High Value Transactions.
During the financial year 2024-25, how many high value transactions are made by taxpayers? Based on that, whether the taxpayer has shown those details in their return of income? If not, a scrutiny notice will be issued to those taxpayers and enquiries about these transactions will be made during scrutiny.
The department is also verifying whether the details of tax deducted at source and tax collected are being deposited into the government treasury or not. Those who have deducted or collected but did not deposit are their target for scrutiny.
Following types of transactions are considered as High Value Transactions:
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Big amount of deposit put in a bank.
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From the current account with a bank, during the year cash withdrawn more than Rs. 30,00,000.
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During the year, any property worth more than Rs. 30,00,000 is purchased or sold.
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Payment of Rs. 10,00,000 or more made on a bank credit card.
On such types of transactions, the department is verifying whether they are genuine or not. It is not necessary that these transactions are made in cash.
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Any kind of transactions made with a foreign country for purchase or sale of goods or for any purpose.
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Investment made in bonds or mutual funds exceeding Rs. 10,00,000.
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Any expenditure for a foreign tour exceeding Rs. 2,00,000 and whether it is genuine and necessary.
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Though the income of the assessee is below the taxable limit, if any transaction in his bank account is more than Rs. 50,00,000, detailed scrutiny will be done.
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Even expenditure on electricity bills exceeding Rs. 1,00,000 during the year will lead to detailed scrutiny.
The above types of transactions done during the year will be considered as high value transactions and a scrutiny notice will be issued.
For the financial year 2024-25, the income tax department has focused on big amounts of expenditure claimed and concealed income to pay less income tax. For this, the department will use Data Analytics. Big transactions through banks that are not shown will be captured by using this data analytics system.
Similarly, any transaction made through a credit card and not shown in the return of income will be found out by the department. All the banks are instructed to provide details of all big transactions before 31st May 2025. This includes transactions over Rs. 50,00,000 and the purchase or sale of immovable property of Rs. 30,00,000 or more.
The income tax department is asking in detail with all banks, post offices, co-operative societies, finance companies, mutual funds, etc. for transactions during the year.
Even at present, all the banks, post offices, co-operative societies, finance companies, and mutual funds are providing significant financial activities of taxpayers to the income tax department at the end of the year.
It is advisable to taxpayers that nowadays the Income Tax Department is watching all kinds of financial transactions of an assessee. BE CAREFUL.
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