The Income Tax Department is ready to take a jibe on your cash transactions. These dealings were in the IT radar in the past as well but after the drive to make the system more transparent a cash limit has been set. The IT department will now check the details of any cash transaction of more than Rs 50000 if you are a non salaried individual. The method adopted by the Income Tax officials is through the introduction of new forms at the time of filing of returns. These forms will contain points that will need to be answered by a non salaried person if his/her dealing in cash is more than Rs 50000. Some other critical points will also need to be answered by the employee.
In respect to this, the mood of the department is to check the details of any personal assets maintained by the individual, dealings in assets. These assets may include vehicles owned by the individual or property in bullions like Gold ornaments, Real Estate investments etc. The purchase of these products will now on invite identity proofs of the holder. The new guidelines have been framed in order to crack down money laundering, which has been in the news for some time now. The framework of IT department also includes paintings, work of art that you possess. These details furnished by the persons are for the purpose of tracking chain of illegal transactions and dealings.
What all things are in Income Tax radar?
As stated, a work of art, bullions, vehicles, houseboats, yachts and private aircrafts etc. will form part of the documentation required by Income Tax. The department is also planning to include land deals, money deposited in shares, bank deposits, insurances in the name of the individual. The Income Tax Department is also asking for documents in relation to your loans and advance payments. That’s not the end of the list; the department will ask for your debt and liabilities as well. So a person will have to submit a statement carrying his possessions, purchases and liabilities when asked for or, in some cases at the time of purchase only.Online GST Certification Course by TaxGuru & MSME- Click here to Join
The step has been taken so that proper facts are reported which were generally hidden from the department at the time of filing the returns. The cross check will be more stringent and the statement by the individual will be checked with third party sources of tax officials. So concealing of facts can land you in a soup.
High Net Worth Individuals:
Non salaried individuals particularly High Net Worth Individuals (HNI) will have to submit the forms along with the returns. The idea is to check the wealth of the individual and commonly for HNIs. Possession of illegal wealth will therefore come under the scanner of Income Tax and it will be liable to tax. For the fiscal year 2012-13, the estimated collections can be near Rs 950 crores against collections of Rs 866 crores from such wealth collections. For any property or asset outside India, the wealth needs to be disclosed as well.
Separate Forms like Income Tax Returns II, III and IV have been designed for the persons who possess wealth outside the country or for persons who are non salaried and have income other than salaries. The disclosure is easy and the individual can save himself from unnecessary trouble if he possesses genuine wealth. For those who possess illegal wealth, Beware!!!!
Source: InvestmentYogi is one of the leading personal finance websites in India