The olden days are gone, where the revenue authorities came to know about a person's financial transactions through various returns submitted by himself (i.e., if a person did not report any of the financial transaction undertaken by him, it is hard for the revenue authorities to gather information about the unreported transaction). Now-a-days the Income Tax Department collects the "High Valued Transactions" through Annual Information Report (AIR) from various specified person which are recorded by them during the financial year.
The summary of financial transactions being reported to Income Tax Department under various provisions of Income Tax Act, 1961 through Annual Information Report are listed below:
S.No | Nature of Transactions | Value of the specified transaction | Class of reporting person |
1 | Payment made in cash for purchase of bank drafts or pay order or banker's cheque | Amount aggregating to ten lakh rupees or more in a financial year | A banking company or a co-operative bank including notified regional rural bank |
2 | Cash deposit or cash withdrawals (including through bearer's cheque) in or from one or more current account of a person | Aggregating to fifty lakh rupees or more in a financial year. | A banking company or a co-operative bank including notified regional rural bank |
3 | Cash deposits (Savings Account) in other than current account and time deposit account of a person | aggregating to ten lakh rupees or more in a financial year | A banking company or a co-operative bank including notified regional rural bank and Post Office |
4 | One or more time deposits other than a time deposit made through renewal of another time deposit) of a person. | aggregating to ten lakh rupees or more in a financial year | A banking company or a co-operative bank including notified regional rural bank , Post Office, Nidhi Company and NBFC |
5 | Payments made by any person against bill raised in respect of credit card issued that person. |
| A banking company or a co-operative bank including notified regional rural bank. |
6 | Receipt from any person for acquiring bonds or debentures issued by the financial institution. | Aggregating to ten lakh rupees or more in a financial year. | A company or institution issuing bonds or debentures. |
7 | Receipt from any person for acquiring shares including share application money issued by the company | Aggregating to ten lakh rupees or more in a financial year. | A company issuing shares |
8 | Buy back of shares from any person other than the shares bought in the open market | For an amount or value aggregating to ten lakh rupees or more in a financial year. | A company listed in a recognised stock exchange purchasing its own securities. |
9 | Receipt from any person for acquiring units of one schemes of mutual fund other than the amount received on account of transfer from one scheme to another scheme of that Mutual Fund. | Of an amount aggregating to ten lakh rupees or more in a financial year. | A trustee of a Mutual Fund or such other person managing the affairs of the Mutual Fund as may be duly authorised by the trustee in this behalf. |
10 | Receipt from any person for sale of foreign currency including any credit of such currency to foreign exchange card or expenses in such currency through a debit in credit card or though travelers' cheque or draft or any other instrument. | Of an amount aggregating to ten lakh rupees or more during a financial year. | Athourised dealer, Money Exchanger or off-shore banking unit or any other authourised person under FEMA. |
11 | Purchase or sale by any person of immovable property for an amount of thirty lakh rupees or more or valued by stamp valuation authority. | For amount/value at thirty lakh rupees or more. | Inspector-General appointed under section 3 of the Registration Act, 1908 or Registrar or Sub-Registrar appointed under section 6 of that Act. |
12 | Receipt of cash payment for sale by any person, of goods or services of any nature. | Exceeding two lakh rupees. | Any person who is liable for audit under section 44AB of the Act. |
The awareness of a person that various financial transaction undertaken by him/itself is already in the hands of the Income Tax Department may help him to plan his tax return effectively by not falling in the list of defaulters or non-disclosure of income which attracts 200% (subject to various provisions under Income Tax Act, 1961) of the tax payable from the income earned from the un-reported financial transaction.
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