Income tax department is sending messages to pay advance tax on the basis of High Value Transactions shown in Form 26AS. The message says ‘Attention XYZ COMPANY (PAN XXXXX—–X), Income Tax Department has received information about certain high value financial transactions relating to FY 2020-21. Please view transactions under e-Campaign tab on Compliance Portal (CP) and remember to pay appropriate advance tax. Access CP by logging into e-filing portal and clicking on ‘Compliance Portal’ link under ‘My Account’ tab – ITD’
b) If you are receiving above message you are under radar of Income-tax Department. Gone are days when every transaction was performed in Cash and many people were having huge cash in hand. Now if you perform certain high value transaction, then it will be shown in Form 26AS and you have to pay advance tax and show income in return accordingly.
High Value transactions are transactions which are incurred in high denominations. Reporting Authorities like banks, post office, Registrars, companies are required to intimate about high value transactions to Director of Income-tax (Intelligence and Criminal Investigation) by filing Form 61A called Statement of Financial Transaction. Through this form Investigation Wing of Income-tax Department comes to know about your high-value transactions and then it checks whether such person has filed return of income or not. If return is filed whether income disclosed is true and taxes have been paid correctly or not.
Login to your income tax account and reply to compliance raised by department. The compliance is raised on the basis of Significant Transactions which are-
a) BUSINESS TRANSACTIONS REPORTED IN GSTR RETURN WHICH IS REFLECTED IN FORM26AS – For Eg: It says you have purchased goods worth Rs.70lakhs and stated turnover 10 crores. Please see whether you have paid advance tax or not
b) TDS DEDUCTED– For Eg: It says you have deducted TDS @ 10% of Rs.8lacs, it means you have paid 80lacs. Please pay advance tax. Likewise there may be many transactions like-
c) PURCHASED OR SOLD PROPERTY- Registrars/ Sub-registrars are required to report Income-tax Department about Purchase or sale of immovable property whose Stamp Duty Value is Rs.30 lacs or more. This will appear as high value transaction in Form 26AS.
d) WITHDRAWN CASH FROM BANK ACCOUNT AND TDS DEDUCTED U/S 194N- From 01stJune 2020 banks and post offices are required to deduct TDS if any person withdraws cash above 20 lacs or 1 crore based on their income filing status @ 5% or 2%. It says you have withdrawn cash amounting to Rs.60lacs, please pay advance tax
e) DEPOSITED CASH IN BANK ACCOUNT.- Banks are required to report Deptt., if Cash deposit/ Withdrawal/ Fixed deposit made in bank account of Rs.10 lakhs or more in all bank accounts and Rs.50 lacs made in all Current accounts.
f) TIME DEPOSITS made, Purchase of Debentures or bonds, investments made in shares and Mutual Funds, buy back of shares by company, purchase of foreign currency of Rs.10 lacs or more.
g) PAYMENT MADE FROM CREDIT CARD OF RS.10 LACS OR MORE against bill raised of purchases or expenses or Rs.1 lacs paid in Cash.
For more details of high value transaction please click here.
Please verify details shown in Compliance Portal and submit reply as –
Information is denied
Information is not fully correct
Information relates to other
Information is duplicate / included in
other displayed information
Information is denied
4. OUR COMMENTS
All the persons who do High-Value transactions are in radar of Income-tax Departments. In maximum cases income tax notices are issued based on these High Value Transactions. So you have to keep yourself informed about all these transactions and file return accordingly. Let us bring into practice to avoid cash transactions so that income-tax notices can be avoided. Govt. is fastly moving towards digitization of its entire working system and now only good tax planning can save our taxes. Let us ensure to save taxes legally.
The above comments do not constitute professional advice. The Author can be reached at firstname.lastname@example.org or visit website www.financialtreecompany.com. My name is CA Divya Agrawal and I am Practising Chartered Accountant, CEO and Founder of FINANCIAL TREE COMPANY (An online return filing and Tax Consultancy Company). We also upload educational videos in You tube and name of our channel is FINANCIAL TREE COMPANY. Our aim is to help people in improving their financial health by spreading knowledge and love. Stay Financially Fit and Healthy.