The Income Tax Department has increased its vigilance against unreported income to combat tax evasion. You are currently required to submit PAN for all high-value transactions. Property registrars and financial organisations you work with, such as your bank, insurance, mutual fund company and credit card business, provide information to the tax department about your significant transactions. The tax division compares this data with the income tax returns you submit.
Moreover, the rise in internet penetration and social media pages of the tax evaders also give income tax personnel a clue to investigate. The IT department via Project Insight keeps an eye on tax evaders and others who portray themselves as wealthy on social media.
Under Project Insight, Income tax officials, after bank alerts investigate the social media account of the alleged tax evader, take cognisance. For instance, if a person bought a car costing more than Rs 10 lakh then he/ she is subject to a 1% luxury charge. In such circumstances, the IT department will search the income tax returns of the person to know about his income and its source. Further IT personnel has the power to ask the bank to submit their income details for verification.
Through these clues, the department investigates and compares income with the person’s expenses and investments to assess if the correct tax liability is tax evasion or not. The tax department keeps an eye on your high-value transactions in the following ways:
1) If you deposit cash, make a demand draft, or make fixed deposits totalling up to or exceeding Rs 10 lakh in a financial year under multiple accounts, your bank will notify the tax authorities.
2) The property registrar is required to report any sale or acquisition of real estate costing more than Rs 30 lakh.
3) If a property is purchased for more than Rs 50 lakh, TCS (tax collected at source) at the rate of 1% is deducted and deposited to the tax department by the buyer.
4) Your credit card provider will disclose the transactions to the tax authorities if you made a cash payment of at least Rs 1 lakh to your credit card or at least Rs 10 lakh through any other method during the financial year.
5) Companies are required to submit purchases of mutual funds, shares, and debentures totalling at least Rs 10 lakh to the tax authorities.
6) You need to record your assets and obligations on a new ITR (income tax return) form if you earn more than Rs 50 lakh annually.
7) Any purchase of goods or services costing more than Rs 2 lakh must now be reported using a PAN.
Read all the Latest Business News here
Comments
0 comment