How to maintain safe distance from income tax department!! -

Below is the list of expenses/investments done by us, which at any point of time may invite notice from income tax personnel.

•  Depositing yearly cash above Rs.10 lakh in saving account and depositing/withdrawing cash of Rs.50 lakh and more in current account.
•  Making credit card payment and investment in Mutual Fund above Rs.2 lakh.
• Investment in Shares and Gold ETF above Rs.1 lakh.
• Investment in RBI Bonds / Debentures / Bonds above Rs.5 lakh.
• Purchase / Sale of Real estate above Rs.30 lakh.
•  Receipt of Cash Payment exceeding Rs.2 lakh from sale of any Goods and Services.

1.    How do the income tax personnel get to know about all of these transactions?

v  To keep an eye on such high value transactions, the IT Department has developed a statement of financial transactions called Annual Information Report (AIR).
v  On that basis department shortlist their targets and sends them notice.

2.    Who provides the high value transaction information to prepare the AIR?
v  Banks
v  Mutual fund companies
v  Companies issuing Shares
v  Credit card companies
v  Sub-registrar offices on Real estate deals.

3.    How can we trace our High Value Transactions reported under AIR?
v  We can trace it in our 26AS report under AIR section.
v  All high value transactions will be reflected therein.

4.    How to avoid receiving a notice from IT department?
v  Most important step is to file your income tax returns on time and file them correctly.
v  Always re-check your Tax credit with the 26AS statement.

v  Disclose all your Taxable as well as Exempt income under right head.