5 days ago
High-value transactions under scanner as IT Department gets stricter
The Income Tax Department has intensified its efforts to identify individuals who spend large sums of money while potentially concealing their true income. By leveraging advanced data analytics and collaborating with financial institutions, the department closely monitors high-value transactions to tackle tax enhanced scrutiny involves partnerships with banks, post offices, co-operatives, fintech companies, and mutual funds, all of which are required to submit details of significant financial activities annually under the Statement of Financial Transactions (SFT) by May ARE HIGH-VALUE TRANSACTIONS?High-value activities under watch include large deposits, property deals, and substantial credit card payments. For instance, if you deposit or withdraw over Rs 50 lakh from a current account, spend more than Rs 30 lakh on buying or selling property, or pay over Rs 10 lakh a year through your credit card (even if it's not in cash), the department is keeping tabs.
Even foreign exchange transactions and large investments in mutual funds or bonds can raise red flags if they cross the Rs 10 lakh mark. The department mandates that any transaction exceeding the defined thresholds must be measures aim to ensure that individuals who engage in such transactions also accurately declare their tighten the grip further, new rules have come into play. For instance, even if your total income is below 2.5 lakh, and you're otherwise not required to file an income tax return, you'll still have to file one if you've deposited 1 crore or more in your bank account, spent over 2 lakh on a foreign trip, or paid electricity bills totalling more than 1 lakh in a department has also introduced a tax deduction at source (TDS) on large cash withdrawals. If you take out over 1 crore in cash from your account, 2% TDS applies. For non-filers or habitual offenders, this can go up to 5%. Even those withdrawing over 20 lakh in some cases may face a 2% TDS if they haven't been filing returns measures are part of the department's broader initiative to ensure that all high-spending individuals fairly declare their income in accordance with their Reel
