10 Transactions Tracked by The Income Tax Department

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After the demonetization and GST tax regime by the Modi government, digital transactions are on a rise. There is a number of people who have used the digital payment for the first time after the demonetization. Do you know that which are the transactions done by you are being tracked by the income tax department? In this article, I will tell you 10 such transactions tracked by the income tax department.

Today most of our big expenses and investments we do are through the digital mode. Digital mode means, RTGS, NEFT, Net banking, etc. For doing such high-value transactions, you need to furnish your PAN card number along with your bank details. Due to this Income Tax department has also upgraded itself and is now using the latest technologies to track the transactions.

The income tax department has come up with new ways to identify tax evasion. Now the Income Tax department is tracking your expenses. The logic behind is that you can hide your income but you cannot hide your expenses because your investment and expenses are now digital.

10 Transactions Tracked by The Income Tax Department

The income tax department has developed a new mechanism through which it can track your high-value expenses even if those are done through the digital mode.

Let’s check which are the transactions are being tracked by the income tax department and how they are getting this information about your transactions. There are 10 such transactions that are being tracked by the income tax department.

Saving Bank Account

The first transaction which is being tracked by the income tax department is your saving bank account. If you are depositing or withdrawing 10 Lakhs or a higher amount in your savings bank account, the information is shared with the income tax department by your bank.

Here we are talking about only cash transactions only. Deposition done through digital mode is not being counted for tracking your bank account.

Here ₹. 10 lakhs transactions don’t necessarily are done as a single transaction. It will be tracked even if it is being done in multiple transactions. So if you are doing 10 lakhs of cash deposits or withdrawal in let’s say 6 transactions in a year, the same will be tracked by the income tax department.

Current Bank Account

If you are depositing or withdrawing ₹ 50 lakhs in a financial year in your current bank account, then the same will be tracked by the income tax department. Your bank will have to provide these details to the income tax department.

Here also we are talking about the cash deposition or withdrawal only. All digital transactions are not a part of this criteria.

Fixed Deposit

If you have done fixed deposits for ₹ 10 lakhs or more then that information will also be provided to the income tax department by your bank.

Here we are talking about all types of transactions like cash and digital modes like NEFT, RTGS or net banking, etc. If you already have any fixed deposit with the bank and you have done a renewal fo the same then the same will not be informed to the income tax department.

Credit Card Bills

If you are paying a credit card bill of more than 1 lakh and if you have made the payment in cash for ₹ 1 lakh or above then the information will be given to the income tax department.

Secondly, if the credit card bill is for more than 10 lakh in a financial year then this information will be provided to the income tax department by your credit card company.

Demand Draft

If you are paying ₹ 10 lakhs as cash for issuing a demand draft in a financial year then this information will be passed on to the income tax department by the bank.

Usually, the bank is asking for your PAN card number while you are going for issuing a demand draft worth more than 50000.

If the demand draft is being issued against the cash deposition then these transaction details are given to the income tax department by your bank.

Investment in Shares

If any person during the financial year buys the shares worth ₹ 10 lakhs or more, then that information will be passed on to the income tax department. The company of which the shares are being bought will provide this information to the income tax department.

This transaction could be in cash or digital payment, the information will be given to the income tax department.

Investment in Mutual Funds

If a person is investing for ₹ 10 lakhs or more in the mutual funds in a financial year, then this information will be given to the income tax department by the mutual fund company.

This transaction could be anything like cash or digital payment, the information will be passed on to the income tax department.

Foreign Currency

If you are paying cash or digital payment of ₹ 10 lakhs or more for buying foreign currency then that information will be passed on to the income tax department by the bank or the company from where you are buying the foreign currency.

The logic here is, if you can spend ₹ 10 lakhs on foreign currency then your income should be such high that you can buy such a high amount of foreign currency.

Immovable Property

If you are buying any immovable property worth ₹ 30 lakhs or more in a financial year, the information will be provided by the registrar office to the income tax department.

Here the payment could be the cash of digital or cheque any mode the information will be passed on to the income tax department.

One thing you need to understand here is we are talking about the registry value of the property and not the actual value. This means if you are buying a property worth ₹ 50 lakhs and its registry value is ₹ 28 lakh then this information will not be passed on to the income tax department.

Cash Payment > 2 Lakhs

If you are buying any product or service worth more than ₹ 2 lakhs and you are paying the amount in cash, then that information will be provided to the income tax department.

Say, for example, you are buying a gold worth ₹ 3 lakhs from the jeweler and paying the amount in cash to a jeweler. Then this information will be passed on to the income tax department by the jeweler.

Same way, if you are buying a car and made a payment in cash then that information will also be forwarded to the income tax department.

What will happen on transactions tracked by the income tax department?

When the income tax department receives such information from the bank or any other sources, then they will cross-check and verify the income of that person and its income tax return filed by him. If the income tax department finds any discrepancy in the income vs expenses then they might send the notice to that person asking for the justification about the expenses.

If any person has not filed any income tax return and is spending such a high amount on various transactions, then that person will surely receive the income tax notice.

Conclusion:

The purpose of this article is not to threaten you, but just to make you aware that these types of high-value transactions tracked by the income tax department. There is a time we do such transactions unknowingly and may get the notice from the income tax department.

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