The Income Tax Department is cracking down on big spenders who might be dodging their taxes. They’re using advanced data analysis and working closely with financial institutions to keep a close eye on high-value transactions to ensure everyone pays their fair share.
What’s Being Monitored?
The I-T Department is partnering with banks, post offices, co-operatives, fintech companies, and mutual funds to collect transaction data. These institutions are required to report details of significant financial activities annually under the Statement of Financial Transactions (SFT) by May 31st.
Here’s a look at the transactions under scrutiny:
| Transaction Type | Threshold |
|---|---|
| Cash payments for drafts or RBI instruments | ₹10,00,000+ |
| Cash deposits in savings accounts | ₹10,00,000+ |
| Deposits or withdrawals from current accounts | ₹50,00,000+ |
| Sale or purchase of property | ₹30,00,000+ |
| Investments in shares, mutual funds, or bonds (cash) | ₹10,00,000+ |
| Cash payments for credit card bills | ₹1,00,000+ |
| Non-cash payments for credit card bills | ₹10,00,000+ |
| Foreign exchange transactions | ₹10,00,000+ |
| Cash deposits in fixed or recurring deposits | ₹10,00,000+ |
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Enhanced Compliance and What It Means for You
The I-T Department has rolled out several enhancements to ensure better compliance:
- Form 26AS & AIS: Your Form 26AS and Annual Information Statement (AIS) now include details of your financial activities reported under SFT. This makes it easier for you to review and verify this information.
- TDS on Large Cash Withdrawals:
- A 2% TDS (Tax Deducted at Source) is applied to cash withdrawals exceeding ₹1 crore.
- If you haven’t filed your Income Tax Returns (ITR) for the past three assessment years, the TDS rates are higher: 2% on withdrawals over ₹20 lakh and 5% on amounts exceeding ₹1 crore.
- Mandatory ITR Filing Triggers: Even if your income is below the basic exemption limit of ₹2.5 lakh, you must file an ITR if you:
- Deposit over ₹1 crore in a current account.
- Spend more than ₹2 lakh on foreign travel.
- Pay over ₹1 lakh in electricity bills.
The goal is clear: if you’re spending big, the I-T Department expects you to declare your income fairly. Make sure all your high-value transactions are accurately reported in your ITR to avoid any penalties or scrutiny.