How Income Tax Department Is Tracking Your Transactions

How Income Tax Department Is Tracking Your Transactions

To check tax evasion, the Income Tax Department has stepped up its vigilance against undeclared income. Now, you have to report PAN on all your high-value transactions. Property registrars and financial institutions with which you deal with like your bank, insurer, mutual fund company and credit card company feed the tax department with information regarding your big transactions.

The tax department compares this information with the return filed by you. “Through these reporting the tax department is trying to compare your overall income with your expenses and investment to assess the correct tax liability and finally the evasion if there is any,” says Sudhir Kaushik, CEO and co-founder of Taxspanner.com.

Here are some of the ways through which the tax department is monitoring your high-value transactions:

1) Your bank will inform the tax department if you have deposited cash, made a demand draft or fixed deposits aggregating up to Rs. 10 lakh or more in a financial year under different accounts.

2) The property registrar is liable to report purchase or sale of immovable property exceeding Rs. 30 lakh.

3) Now, TCS (tax collected at source) at the rate of 1 per cent is deducted and deposited to the tax department by the buyer in case of purchase of property over Rs. 50 lakh. This is just another way of reporting the transaction.

4) If you have made a cash payment of Rs. 1 lakh towards your credit card or Rs. 10 lakh or more through any other mode during the financial year, your credit card company will report the transactions to the tax authorities.

5) Purchase of shares, debentures and mutual funds of Rs. 10 lakh or more will have to be reported by the companies to the tax authorities.

6) If you are earning more than Rs. 50 lakh a year, you have to report your assets and liabilities in a new ITR (income tax return) form this year.

7) Now reporting of PAN is mandatory for making any purchase of goods and services of more than Rs. 2 lakh. Also, a TCS (tax collected at source) has been introduced from June 1 in case of purchase or sale of any goods and services for Rs. 2 lakh and more in cash.

8) According to experts, TDS is another way of tracking income of tax payers. Banks deduct TDS if interest income on fixed deposits is more than Rs. 10,000 in a year.

9) A 1 per cent luxury tax is levied on purchase of car priced over Rs. 10 lakh. It will be deducted by the seller of the car and will be applicable on ex-showroom price. However, this extra payment could be set off against the total tax liability of the buyer.

10) You also have to give your PAN for the following transactions:

a) Sale or purchase of vehicles other than two-wheelers

b) Opening a bank or a demat account; applying for credit card

c) Opening a fixed deposit of more than Rs. 50,000

d) Payment of more than Rs. 50,000 towards insurance premium

e) Paying more than Rs. 50,000 in cash towards restaurant or hotel or foreign trip bills

f) Purchase of mutual funds, debenture, bonds worth more than Rs. 50,000

g) Depositing cash or more than Rs. 50,000 in bank

46 Replies to “How Income Tax Department Is Tracking Your Transactions”

  1. ,fatheri am making loan repayment on my daughter loan taken for her foreign education ii sbi. Loan was taken when she was major. i hv given my property as a mortagage. can i claim income tax rebate for repayment made by me by transfer.As nri she is not claiming any it rebate

    1. If the education loan was taken only in the name of your daughter then as a mother and guarantor you are not eligible to claim any rebate on the education loan taken by your daughter.

  2. ठीक है अगर हम भारतीय नागरिक हैं और हम इंकमटैक्स पे कर रहे है और सरकार हमारे ट्रांजेक्शन को देख रही है तो उसमेँ खराबी क्या है । एक जिम्मेदार नागरिक की तरह व्यहवार करना चाहिए और सरकार से ही सारी उम्मीद नहीं रखनी चाहिए । देश में जी एस टी लागू हो गया है तो पैट्रोल और डीजल को भी इसके तहत लागू करना चाहिए । सिर्फ एक टैक्स प्रणाली ही देश में होनी चाहिए और इसके स्लैब को भी और ठीक करने की जरूरत है । जी एस टी के कलेक्श को देखते हुए ये अनिवार्य है तभी 2019 का चुनाव का रिजल्ट भी शानदार होगा ।
    सतजीत सिंह
    लखनऊ

    1. Why the Government is tracking only general public? Why not tracking politicians MAP MLA and Thier relatives? How these corrupt ministers and Thier relatives becomes millionaire in short period? Only middle class people are facing these actions after paying all taxes to the government ! Just think it’s justice to middle class

      1. Why the govt compelling to file I tax to the senior citizens as because the have filed I tax since beginning of their service till at the age of his retirement.while all the MP S and the politicians are fully examples to submit a single paisa as tax The attention of FM is drawn to wars this fact

      2. Very nice question……why not government tracking politicians…..Hope there was some report that 81% CMs are crorepati……How they became…can income tax looking on this…

      3. I agree with this opinion. MLAs, MPs, Ministers get salary. It means they are Public Servants. Why their salary, perquisites are not taxed. I understand one perquisite i.e. telephone allowance of Rs. 15,000/- per month is given to these politicians. Mobile Service providers have plans to provide at a price of Rs. 399/- (Rupees Three Hundred and Ninety Nine Only) unlimited STD from place of mobile and on roaming with 1 GB Mobile Data per day for 70 days i.e. Rs. 171/- per month approximately. Then why Rs. 15,000/- are being paid to these politicians. This is all Tax Payer’s money, which is being pocketed by these politicians. This id Not Limited to telephone, but all other perks being enjoyed by them

    2. GSt is a good idea but implementationby Jaitely is full of confusuon. I have notuced that in Australia it is easy to calcylate as GST is 10% across all products and services. Here Jaitley is bringing in 5% to 28%. Making the situation more confusing. Petrol and alcohol must also be brought under GST.

    3. I agree with you sir. As a nation and society, we are moving towards improving compliance. Hope it helps in improving the overall scenario and our future generations get the benefit of it.

  3. Can I claim for deduction of hospitalization bills of my widowed mother as she does not have any insurance and I can not claim on my Insurance and she is dependent on me

    1. Still some business men are trying to hide their income and expenditure by foul means. IT department shoud or the Government should use the services of retired Goverment Servant to get feed back about the Tax Evade rs of their respective areas and localities..

  4. corruption at the lower levels at villages,municipalities,district adm,electricity,water basic services providers levels and politicians under offences and fast track courts, Officialial LIQUIDATORS APPOINTED BY THE HIGH COURTS – NEEDS TO BE ERADICATED, 95 % POPULATION DOES LIVE UNDER DURESS AND DARE NOT GO TO COURTS SEEKING JUSTICE, SIMPLE CASE OF INTERPRETATION OF A GOVT LETTER AND GIVING JUDGEMENT -TOOK 15 YEARS,AN NBFC DEPOSITORS AND GETTING THEIR DEPOSITS PRINCIPAL AMOUNT BACK -GOES ON FOR DECADES -CHIEF PURPOSE OF DEPOSITING AND INVESTING FOR OLD AGE NEEDS -TOTALLY DECIMATED-
    JUDICIAL SYSTEM IS NOT DETERRENT-JUSTICE DELAYED AND BEING DENIED. Top judges admit India’s justice system is a ‘tragedy’ as common …
    http://www.dailymail.co.uk/…/Top-judges-admit-Indias-justice-tragedy-common-citizens-ig...
    Oct 7, 2013 – The Supreme Court, india’s highest judicial body, has admitted that the Indian judiciary is ignoring the common man and giving priority to rich, powerful and influential people when it comes to hearing cases.

    13 TONS GANZA IN TELANGANA RAZED-STAFF STEALING MADE IT TOUGH TO STORE IT
    CHARACTER EDUCATION AND MAKING JUDICIAL SYSTEM ACT AN EFFECTIVE AS DETERRENT -ONLY ANSWER.

  5. PARDARSHITA & ACCOUNTABILITY KI BAT JANTA & SARKAR DONO PAR LAGU HONA CHAHIYE. SARKAR BHI PARDARSHITA BANAYE RAKHE.

  6. ठीक है अगर हम भारतीय नागरिक हैं और हम इंकमटैक्स पे कर रहे है और सरकार हमारे ट्रांजेक्शन को देख रही है तो उसमेँ खराबी क्या है । एक जिम्मेदार नागरिक की तरह व्यहवार करना चाहिए और सरकार से ही सारी उम्मीद नहीं रखनी चाहिए । देश में जी एस टी लागू हो गया है तो पैट्रोल और डीजल को भी इसके तहत लागू करना चाहिए । सिर्फ एक टैक्स प्रणाली ही देश में होनी चाहिए और इसके स्लैब को भी और ठीक करने की जरूरत है । जी एस टी के कलेक्श को देखते हुए ये अनिवार्य है तभी 2019 का चुनाव का रिजल्ट भी शानदार होगा ।

  7. Dear Sir,
    I am a working lady and pay Rs. 8000 rent every month. My office, asked me to show rent slips/rent agreement for IT return on 14 /01/18. When I requested my landlady and landlord, they both refused. Now within a week of my asking them they want I should vacate their premises. I am seeking help, in this situation what I can do and where I am wrong. We had rent agreement for eleven months and which is finishing in May 2018. Ms.Neelu

  8. बहुत ही अच्छा है और इससे किसी को कोई परेशानी नहीं होनी चाहिए हम पूरी तरह से सहमत हैं

  9. this government is interested and is spying on everyone, the same activity which HITLER was carrying out during the ww 2 days say between 1935 to 1945.And that too people who are payingax doing tasctions thru bank.what about hawala transactions and cash dealings by political parties when cash is distributed during election.
    kya government and politicians fathers country that only tax payers are sped upon. These are all symptoms of a dictotirial governance.

    1. AGREE. Corruption and Corrupt practices stem from Politics and our Politicians in India.. ऊपर से हमारे माननीय नेतागण इनकम टेक्स भी नहीं देते, लेकिन हमारे दिए गए इनकम टैक्स से मौज मस्ती करते हैं l यही नहीं, एक संयोजित तरीके से वह अपनी तनख्वाह तथा भत्ते बढ़ाते रहते हैं I यदि हमारे नेता, वैसे तो शर्म आती है नेता कहते हुए ठीक हो जाएं तो यह देश अपने आप ही सुधर जाएगा I

  10. I am running a paying guest house , By the GO its a non profitable institution , We are charging Rs 1100 for both accommodation , meal and laundry.
    I need to know whether we register our self in GST or not . Its clearly written in GO that Paying guest house are non commercial institution .
    Thanks

  11. To remove corruption from our country, there are two simple way (i) to reduce population (ii) Punishment.
    We can see the current PNB Bank robbery How can culprit leave country when if a small person did any unlawful things can easily caught by Police and such a big deal no one know about.

  12. ठीक है अगर हम भारतीय नागरिक हैं और हम इंकमटैक्स पे कर रहे है और सरकार हमारे ट्रांजेक्शन को देख रही है तो उसमेँ खराबी क्या है । एक जिम्मेदार नागरिक की तरह व्यहवार करना चाहिए और सरकार से ही सारी उम्मीद नहीं रखनी चाहिए । देश में जी एस टी लागू हो गया है तो पैट्रोल और डीजल को भी इसके तहत लागू करना चाहिए । सिर्फ एक टैक्स प्रणाली ही देश में होनी चाहिए और इसके स्लैब को भी और ठीक करने की जरूरत है । जी एस टी के कलेक्श को देखते हुए ये अनिवार्य है तभी 2019 का चुनाव का रिजल्ट भी शानदार होगा । “कांशीराम समाज सेवा समिति, सिखापुर, सागर रायपुर, स.र.न. (भदोही), के प्रबन्धकारिणी समिति के सदस्यों की आम सहमति द्वारा “मुख्यमंत्री सामूहिक विवाह योजना, को प्रारंभ किये जाने हेतु. माननीय मुख्यमंत्री द्वारा अनुमोदित “मुख्यमंत्री सामूहिक विवाह योजना, के अंतर्गत अनुसूचित जाति, अनुसूचित जनजाति, अन्य पिछड़ा वर्ग, अल्पसंख्यक एवम् अन्य अपवंचित वर्ग के गरीब ब्यक्तियों के कन्याओ की शादी हेतु, सामूहिक विवाह के लिये “मुख्यमंत्री सामूहिक विवाह योजना” का सञ्चालन हेतु, निश्चय किया है !
    माननीय मुख्यमंत्री द्वारा अनुमोदित “मुख्यमंत्री सामूहिक विवाह योजना, के अंतर्गत वर्तमान में गरीब, मजदूर, बुनकर एवम् भूमिहीन जरूरतमंद लोकतन्त्र के निराश्रित / निर्धन अनुसूचित जाति, अनुसूचित जनजाति, एवम् अन्य पिछड़ा वर्ग, अल्पसंख्यक के परिवार के विवाह के योग्य कन्या / विधवा / परित्यक्ता / तलाकशुदा महिलाओ के विवाह हेतु, शादी योजना के माध्यम से आर्थिक सहायता उपलब्ध कराते हुये “मुख्यमंत्री सामूहिक विवाह योजना, के माध्यम से सामूहिक विवाह सम्पन्न कराकर कार्यक्रम में सम्मलित होने वाले नागरिको को उनकी सामाजिक / धार्मिक मान्यता एवम् परम्परा / रीति – रिवाज के अनुसार विवाह करने की ब्यवस्था कराकर समाज में सर्वधर्म – समभाव एवम् सामाजिक समरसता को बढ़ावा देने के उद्देश्य से वैवाहिक कार्यक्रम सम्पन्न कराये जाने हेतु, निर्णय किया गया !

  13. It is really highly disgusting to note that only middle class society are high in number hence any govt formed target middle class for more returns. Why is it so.

  14. It is really highly disgusting to note that only middle class society are put to great hardships on tax burden plus the tax paid goes up in vain instant like happenings this days in crores plus plus by esteem looters simply in spite of so many digital India enforced. since they are high in number hence any govt formed target middle class for more returns. Why is it so.fear on each individual a day will come where many will become insane warning…

  15. Sinior citizen ko TAX se bahar rakhna chahiye jisase Sr citizen ko har saal TAX Return na bharna pade Return bharane KE liye bhi kharch karana padta Hai.

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