prpri Advance Tax Payment based on High Value Transactions Advance Tax Payment based on High Value Transactions

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.

1. WHAT IS HIGH VALUE TRANSACTION ON THE BASIS OF WHICH ADVANCE TAX IS REQUIRED TO BE PAID

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.

2. REPLY TO COMPLIANCE IN COMPLIANCE PORTAL

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.

3. WHAT YOU NEED TO DO?

Please verify details shown in Compliance Portal and submit reply as –

  • Bulk Response- Information is correct

Information is denied

  • File Individual transaction reply- Information is correct

Information is not fully correct

Information relates to other

person/year

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 companyfinancialtree@gmail.com 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.

Author Bio

Qualification: CA in Practice
Company: www.financialtreecompany.com
Location: Bhilai, Chhattisgarh, IN
Member Since: 30 May 2019 | Total Posts: 36
FOUNDER AND CEO OF FINANCIAL TREE COMPANY website-www.financialtreecompany.com Contact No. 9111872247 Email ID- companyfinancialtree@gmail.com (AN ONLINE RETURN FILING AND TAX CONSULTANCY COMPANY) View Full Profile

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12 Comments

  1. DIVYA says:

    Got Notice on high value transactions which is bank interest for AY 20-21. My CA didn’t resolved this and now its for me to do the necessary action. Since the window of revised return will be closed, please guide in steps, how do I resolve this

  2. Khushboo says:

    I got high value compliance from income tax department although TDS has been deducted as per form 26AS. What should I do while replying against bank detail section?

  3. avi sharma says:

    Hello, i have already filled the ITR for Financial Year 2019-20, I got the high transaction value notice on 28th march 2021 regarding interest deposited by the bank, I have accepted the same on the e-compliance portal. do I need to fill the revised return for Financial Year 2019-20 or wait for further notice?

    1. Rosh says:

      I also Accepted and submit my response. What to do after this? I guess we need to pay tax. But not sure whats the procedure, can anyone tell us the procedure to calculate and pay tax?

  4. pradeep says:

    I Have received compliance for FD/RD and Savings bank interest for 10 items. For 5 items already I have added those while filing the income Tax under ” Income for other Sources”. For those which response I should mark between below :
    Bulk Response- Information is correct

    Information is denied

    File Individual transaction reply- Information is correct

    Information is not fully correct

    Information relates to other

    person/year

    Information is duplicate / included in

    other displayed information

    Information is denied

  5. kamal pal says:

    Dear Sir,

    We have to file a response against the same topic you have mention, though the portal accessed information as available on GSTN/ 26AS and could not access our ITR records where we have filed the losses occurred in last 4 years straight. Please advice how to respond in our case specific.

    1. Divya Agrawal says:

      Dear sir,
      Transactions are posted on the basis of information collected from various sources. They do not know whether you have incurred losses in past years. They only want to grab your attention towards transactions done by you. It is your call whether u have to pay advance tax or not.If you have losses to be adjusted..you will compute advance tax accordingly.

    1. Divya Agrawal says:

      U must accept or deny details as soon as the details are uploaded in compliance portal. There is no time limit set for responding but these transactions are base for selection of cases for scrutiny or reopening. If you have responded in compliance portal, the matter may get closed there itself

  6. Vasant D Doijode says:

    One of my client has long term capital gain. His estimated tax liability is around Rs. 2 Crores. He is very senior with age of 92 years. He does not have any other income than long term capital gains. As per IT rules he need not pay advance tax. Please confirm whether I am correct,
    Thank you so much.

    1. Divya Agrawal says:

      Yes Sir, Senior citizens above 60 years are not required to pay advance tax if they are not engaged in any business. So it applies to capital gains also.

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