HomePersonal FinanceIncometax15 High Value Transactions tracked by Income Tax

15 High Value Transactions tracked by Income Tax

high value transactions

The transactions done in the high denomination is known as high value transactions. All high value transactions are tracked closely by the Income Tax department. It is mandatory to report all high value transactions in the prescribed format by the banks and all other financial institutions. The prescribed format is called as a Form 61A or Annual Information Return (AIR). Any mismatch found in Income reported in ITR vs investment/expenditure may lead to Income tax notice. So, you need to be very careful while doing financial transactions.

15 High Value Transactions tracked by Income Tax

Cash Transaction

  1. If anyone deposit cash aggregating to Rs 10 Lakh rupees or more in a year in any savings account it is called as a high value transaction.
  2. Payment in cash aggregating Rs 10 Lakh or more in a year for purchase of DD, Pay Orders or Bankers Cheque
  3. Payment made in cash aggregating Rs 10 Lakh or more in a year for purchase of pre-paid instruments issued by RBI
  4. A Cash deposit aggregating to Rs. 50 Lakh or more in a year in one or more current account of a person.
  5. A Cash withdrawal aggregating to Rs. 50 Lakh or more in a year in one or more current account of a person.
  6. A cash deposit in any bank account above Rs. 2.5 Lakh after note ban i.e from 9th Nov, 2016 to 30th Dec, 2016.
  7. A cash deposit in current account above Rs 12.5 Lakh after note ban i.e from 9th Nov, 2016 to 30th Dec, 2016.

Term Deposit in Bank and Post Office

  1. One or more term deposit (other than renewal) aggregating to Rs. 10 Lakh or above.

Immovable Property  

  1. Sale or purchase of immovable property for an amount exceeding Rs. 30 Lakh or above

Credit Card

  1. Credit card payment aggregating Rs.2 Lakh or above in a year is also considered as high value transaction.
  2. An expense in foreign currency via debit card, credit card or traveler’s cheque for the amount exceeding Rs.10 Lakh or above in a year.

Stock Bond Mutual Funds Investment

  1. A receipt of amount Rs.1 Lakh or above in a year for the purchase of shares issued by the company.
  2. A receipt of amount aggregating to Rs.5 Lakh or above in a year for the purchase of bonds, debentures.
  3. Receipt from any person of an amount of Rs. 2 Lakh or above for purchase of units of a Mutual Fund
  4. Cash payment received for the amount exceeding Rs. 2 Lakh for the sale of goods or services by professional.

Also Read – PAN Card Mandatory for 20 Financial Transactions

Who is responsible for reporting high value transactions?

The list of third parties responsible for reporting high value transactions mention above are given below.

  • Banks – Private, public and co-operative banks
  • Post Master General of Post office
  • Non-Banking Financial companies
  • Broking companies issuing shares, debenture, and mutual funds
  • Credit Card Companies

All these third parties need to file Form 61A also called as Annual Information Return. This is as per section 285 BA of Income Tax act 1961. This document contains information about transaction including a name of the person and PAN card number.

How to track your High Value Transactions?

Form 26AS

All high value transactions reported by third parties are visible in Form 26 AS. Form 26S is a consolidated annual tax statement issued by the IT department every year. You can download Form 26AS from Income tax filing website. Form 26AS shows how much tax is credited to your account from various sources like salary, pension, interest income etc. Apart from this Part E of Form 26AS contains AIR transaction information.

Example – Following example shows AIR Transaction for the purchase of Mutual Funds unit more than Rs.2 Lakh.

AIR part E

Cash Transactions

The details of cash deposited in your accounts can also be obtained from Income tax e-filing website. In order to know all cash deposit in your account login to e-filing portal and click on “Compliance” menu. You will find a tab called as “Accounts with Cash Transactions”.

cash transactions

What should you do?

In order to avoid income tax notice or scrutiny you should do following things.

  • You should pay income tax honestly based on applicable tax slab.
  • You should disclose your correct income in ITR.
  • Avoid High value transaction.
  • Check part E of 26 AS for high value transactions.
  • If it is necessary to do high value transaction you should be in a position to justify the source of income.
  • You should mention PAN card details while doing high value transactions.

Remember consequences of doing high value transactions is very scary. It may lead to income tax notice, penalty, and scrutiny. Be careful in doing high value transactions.

Shitanshu Kapadia
Shitanshu Kapadiahttp://moneyexcel.com/
Hi, I am Shitanshu founder of moneyexcel.com. I am engaged in blogging & Digital Marketing for 10 years. The purpose of this blog is to share my experience, knowledge and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion. We do not offer any stock tips, investment, insurance or finance product related advice. Please consult a qualified financial planner and do your own due diligence before making any investment decision.
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