Why should you file your Income Tax Return for the FY 2018-19 before 30-06-2020, if not filed earlier? The finance minister in her recent press release announced several relief measures, among them, very important being extension of last date for filing of the belated Income tax returns for the FY 2018-19 from 31st March 2020 to 30th June 2020, allowing an additional 3 months window to the non-compliant assessees who could not file their income tax returns within the due date due to various reasons. This is a good opportunity for the non-filers and first time tax filers to be tax compliant and make good their books in the records of the Income tax authorities as most of the high to medium value transactions require the submission of PAN and/or Aadhaar card; and also post demonetization and opening of Jan Dhan Accounts, most of the financial transactions are being done through banking channels which also includes use of UPI modes of payments like Google pay, Phone Pe, PayTM etc. Hence, the tax authorities are monitoring your entire financial transactions including your bank receipts, payments, purchases, expenses, spending on credit cards, investments and deposits. The below table depicts transactions in respect of which PAN/ Aadhaar must be mandatorily quoted as per Rule 114B of Income-tax Rules, 1962. S.No. | Nature of transaction | Value of transaction | 1 | Sale or purchase of motor vehicle other than 2 wheeler | All transactions | 2 | Opening a Bank account | All transactions | 3 | Application for issue or debit/ credit card | All transactions | 4 | Opening of Demat account | All transactions | 5 | Payment to a hotel or restaurant against a bill or bills at any one time | Cash payment more than Rs.50,000/- | 6 | Payment in connection with travel to any foreign country or payment for purchase of any foreign currency at any one time. | Cash payment more than Rs.50,000/- | 7 | Payment to a Mutual Fund for purchase of its units | Payment more than Rs.50,000/- | 8 | Payment to a company or an institution for purchase of debentures or bonds issued by it | Payment more than Rs.50,000/- | 9 | Payment to RBI for purchase of bonds issued by it | Payment more than Rs.50,000/- | 10 | Cash deposits in Bank/ post office | Cash deposit more than Rs.50,000/- in a day | 11 | Cash payments for purchase of pay orders/ banker’s cheque from Bank | Cash payment more than Rs.50,000/- in a day | 12 | Time deposits/ Fixed deposits in a bank/ post office/ Nidhi/ NBFC | Amount of more than Rs.50,000/- for single instrument or total of Rs.5 lakh in a year | 13 | Payment for one or more pre-paid payment instruments by RBI | Payment more than Rs.50,000/- | 14 | Payment of Life insurance premium | Total amount more than Rs.50,000/- in a year | 15 | A contract for sale or purchase of securities (other than shares) | Amount more than Rs.1 lakh per transaction | 16 | Sale or purchase, by any person, of shares of an unlisted company | Amount more than Rs.1 lakh per transaction | 17 | Sale or purchase of any immovable property | Amount of Rs.10 lakh or more or SRO value of Rs.10 lakh or more | 18 | Sale or purchase, by any person, of goods or services of any nature other than those specified above | Transaction amount of more than Rs.2 lakh |
From the above table, it can be seen where the PAN/Aadhaar have to be mandatorily submitted while performing the above transactions. Since, the above transactions are PAN linked, the tax authorities have the power u/s. 133(6) of the Income Tax Act to get the information from the respective authorities and track your incomes and spending. Hence, it becomes imperative to have a clear record of all your incomes and expenses and submit the same to the tax authorities. Also, the below table depicts the information which is mandatorily shared by the various persons with the tax authorities as per section 285BA of Income-tax Act, 1961 read with Rule 114E of Income-tax Rules, 1962 annually. S.No. | Nature and Value of transaction | Reporting person | 1 | Payments in cash for purchase of DD/ pay orders for total value of Rs. 10 lakh or more in a year | Bank/ Co-operative Bank/ Banking Institution | 2 | Cash deposits / withdrawals (including through bearer cheque) of total Rs.50 lakh or more in one or more current account in a year | Bank/ Co-operative Bank/ Banking Institution/ Post Office | 3 | Cash deposits of total Rs.10 lakh or more in one or more saving account in a year | Bank/ Co-operative Bank/ Banking Institution/ Post Office | 4 | One or more time deposits of total Rs.10 lakh or more in a year | Bank/ Co-operative Bank/ Banking Institution/ Post Office/ Nidhi/ NBFC | 5 | Payments against credit card bills of a person if paid in cash of Rs.1 lakh or Rs.10 lakh or more by any other mode in a year | Bank/ Co-operative Bank/ Banking Institution/ Credit card issuing company | 6 | Payment for purchase of bonds or debentures of a company of a total amount of Rs.10 lakh or more in a year | Company or institution issuing bonds or debentures | 7 | Payment for purchase of shares including share application money of a company of a total amount of Rs.10 lakh or more in a year | Company issuing shares | 8 | Buyback of shares for an amount of Rs.10 lakh or more in a year | A listed company | 9 | Payment for purchase of units of one or more schemes of mutual funds for a total amount of Rs.10 lakh or more in a year | Mutual Fund company | 10 | Sale of foreign currency/ credit to any foreign currency card/ expense in such currency through a debit or credit card/ travelers cheque/ draft of a total amount of Rs. 10 lakh or more in a year | Authorized persons | 11 | Purchase or Sale of an immovable property for Rs. 30 lakh or more or which has SRO value of Rs. 30 lakh or more | IG/ Registrar/ Sub –registrar | 12 | Payments in cash more than Rs.2 lakh for the purchase of any goods or receipt of any service | A person who is liable to be audited under Income Tax Act |
From the above table, it is pertinent to note that most of the medium to high value transactions are being reported mandatorily by various persons to the tax authorities, who then matches the same with your tax filing database. Hence it becomes important for any person to have a true and correct record of his financial transactions submitted to the tax authorities to avoid being caught in the net of the tax tangle. For any queries, you can write down to kishang@icai.org |