HomePersonal FinanceIncometax15 High Value Transactions tracked by Income Tax

15 High Value Transactions tracked by Income Tax

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 a Form 61A or Annual Information Return (AIR). Any mismatch found in Income reported in ITR vs investment/expenditure may lead to an Income tax notice. So, you need to be very careful while doing financial transactions.

high value transaction india

15 High-Value Transactions tracked by Income Tax

Cash Transaction

  1. If anyone deposits 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 the 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 accounts of a person.
  5. A Cash withdrawal aggregating to Rs. 50 Lakh or more in a year in one or more current accounts of a person.
  6. A cash deposit in any bank account above Rs. 12.5 Lakh after the note ban i.e from 9th Nov, 2016 to 30th Dec 2016.
  7. A cash deposit in the 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 deposits (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 payments aggregating Rs.2 Lakh or above in a year are also considered high-value transactions.
  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 an amount aggregating to Rs.5 Lakh or above in a year for the purchase of bonds, and debentures.
  3. Receipt from any person of an amount of Rs. 2 Lakh or above for the 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 a professional.

Who is responsible for reporting high-value transactions?

The list of third parties responsible for reporting high value transactions mentioned above is 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 the Income Tax Act 1961. This document contains information about transactions including the name of the person and PAN card number.

What should you do?

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

  • You should pay income tax honestly based on the applicable tax slab.
  • You should disclose your correct income in ITR.
  • Avoid High-value transactions.
  • If it is necessary to do high-value transactions 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 are very scary. It may lead to income tax notices, penalties, and scrutiny. Be careful in doing high-value transactions.

Shitanshu Kapadia
Shitanshu Kapadia
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 , tax, financial advice or legal opinion. Please consult a qualified financial planner and do your own due diligence before making any investment decision.