♦ If you are paying more than Rs.50 lakhs to any resident person for any professional / commission or contract work – You need to deduct 5% TDS irrespective of facts that expense is personal or business.

For e.g. Assume you wants to construct a residential house and you hire a contractor and pays more than Rs.50 Lakh you need to deduct 5% TDS irrespective of fact that the expense is personal in nature.

♦ If you are selling “goods” to any person more than Rs.50 lakhs, you need to collect 0.10% TCS from Buyer. However this provision is applicable only if seller turnover is more than Rs.10 crores in preceding financial year.

For e.g. Assume you sells Rs.60 lakhs goods to buyer ABC Limited, then you need to collect 0.10% on 10 lakhs i.e. Rs.1000 from ABC limited in addition to your sales invoice amount.

Income tax

♦ If you are making payment to a tour operator for your travel plans outside India, then tour operator will collect 5% from you as TCS in excess of Rs.7 Lakhs package.

For e.g. Assume you paid Rs.10 lakhs to a tour operator for booking your travel plans outside India, then tour operator will collect Rs.15000/- as TCS {(10 Lakhs – 7 Lakhs)*5%} in addition to 10 Lakhs for tour.

♦ If you are transferring more than Rs.7 lakhs per financial year outside India, then Banks /authorised person will collect 5% TCS in addition to 7 Lakh rupees.

For e.g. Assume you paid Rs.10 lakhs to your relative outside India, then Banks /authorised dealer will collect Rs.15000/- as TCS {(10 Lakhs – 7 Lakhs)*5%} in addition to 10 Lakhs for transfer amount.

♦  If you deposited more than Rs.1 crores in any current account, then you need to compulsory file your income tax return even though your income is less than basic exemption limit. Please note deposit includes all transaction i.e. cash + cheque + NEFT + transfers etc.

For e.g. Assume you deposited Rs.60 lakhs in Kotak bank and Rs.60 lakhs in HDFC Bank cuurent account, i.e. Total Rs.1.20 crores, then you need to compulsory file income tax return.

♦ If you have incurred more than Rs.2 lakhs for your foreign tour, then you need to compulsory file your income tax return even though your income is less than basic exemption limit. Please note if you paid whether for yourself or for any person, it doesn’t matter.

For e.g. Assume you go to Dubai and incurred total expenditure of Rs.3 lakhs, then you need to file your income tax return compulsory.

♦ If you have incurred more than Rs.1 lakhs for your electricity bill in a financial year, then you need to compulsory file your income tax return even though your income is less than basic exemption limit. Please note if you paid whether for your office or for your house, it doesn’t matter as no clarification from CBDT has been made.

For e.g. Assume you paid Rs.1.20 lakhs total for your office electricity bill, then then you need to file your income tax return compulsory.

♦ From Financial Year 2020-21, every individual has option whether they want to follow old tax rate (i.e. claiming 80C Benefits etc.) or follow new rate. To decide which option is best, individual can use below link. Please note that there are certain conditions to avail the new tax rates.

https://www.incometaxindiaefiling.gov.in/Tax_Calculator/index.html?lang=eng

♦ From Financial Year 2019-20 income tax return, you can now claim 2 residential houses as “self-occupied” instead of “deemed let out” till FY 2018-19.

For e.g. You have 2 residential houses, then till FY 2018-19 you need to declare 1 residential house as deemed let out and offered tax on it even though it is not let out and vacant. However from FY 2019-20, you can claim upto 2 residential houses as self-occupied and no taxes will be counted on it

♦ If you cash deposit or cash withdraw more than Rs.50 lakhs to / from your current bank account – Bank will report to Income Tax authority.

If you cash deposit more than Rs.10 lakhs from your savings bank account – Bank will report to Income Tax authority.

If you do fixed deposit more than Rs.10 lakhs in a financial year – Bank will report to Income Tax authority.

If you do paid more than Rs.10 lakhs to a credit card company in a financial year – Credit Card Company will report to Income Tax authority.

If you purchase share of company (listed or unlisted) more than Rs.10 lakhs in a financial year – Company will report to Income Tax authority.

♦ If you are a seller selling goods or services from an e-commerce operator, then e-commerce operator will deduct 1% TDS on Invoice value. Please note similar provision is also there in GST Act, hence double deduction for a seller selling from e-commerce platform.

For e.g. You sells goods or services from amazon, then amazon will deduct 1% TDS on sales invoice in addition to his commission and other charges.

♦ Every person need to report in his income tax return about all companies where he or she is a director. Further they are also required to report all shares of company (other than listed shares) were he or she is a shareholder.

♦ Make sure you report all your bank account whether current, savings, overdraft etc. in your income tax return. Non-disclosure will initiate other complications.

♦ Make sure you verify your 26AS before filing income tax return and if any unusual or unidentified transactions are reported then do not claim credit of that. Further if any transactions are wrongly reported by deductor then report to it to revised his TDS return, so that proper figures are reflected in your 26AS.

♦ Make sure your GST return sales matches with your income tax return sales and vice-versa and if there is any deviation then prepare a reconciliation so that you are ready when notice comes to you.

♦ Make sure all share market transactions are properly reported in your income tax return as there would be serious implication of not reporting to.

♦ Make sure all foreign income or foreign bank account or any foreign company holding is reported in your income tax return, as non-disclosure will have serious implications of it.

Author Bio

Qualification: CA in Practice
Company: Owner - P Mehta & Jain
Location: Ahmedabad, Gujarat, IN
Member Since: 14 Jul 2017 | Total Posts: 5
Chartered Accountant, Registered Valuer, DISA (ICAI) View Full Profile

My Published Posts

More Under Income Tax

8 Comments

  1. Shyamlal says:

    Sir, credit card txn 10 lakhs limit.
    I ve shortage of money so used to convert the amount to cash by using insurance payments .
    I ve 2 lakh limit in credit card.
    In a yr ,24 lakhs.
    Will I b asked to justify?

    1. CA Pratik Mehta says:

      Yes, if same credit card company then that company will report to Income Tax authority as total payment is more than Rs.10 Lakhs per person per financial year

    1. CA Pratik Mehta says:

      Yes, the moment you shift from one bank to another, it means you are closing term deposit in one bank and creating new one in another bank. Every bank who opens term deposit more than Rs.10 lakhs per person per financial year needs to report

    2. U. K Gupta says:

      If my FD of more than Rs 10 lac matures in a bank, and I open a senior citizen saving scheme account with the proceeds of my matured FD in the same bank branch, without withdrawing the amount in cash, would it still be reported to Income Tax department?

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

September 2020
M T W T F S S
 123456
78910111213
14151617181920
21222324252627
282930