Admin[By Shaleen Shah (Partner), VNCA]
The Income Tax department has over the years put in place several reporting and compliance mechanisms to track high value financial transactions including cash transactions. Measures to track cash transactions are listed hereunder.
Filing a Report of specified high value transactions (Form 61A)
Business / Professional entities have to report receipt of cash payment exceeding Rs 2 lakh for sale of any goods or services.
Banks / Post Offices have to report cash deposits aggregating Rs 10 lakh or more in a financial year in one or more accounts (including time deposits) of a person.
Banks have to report Cash deposits or withdrawals aggregating to Rs 50 lakh or more in a financial year in one or more Current Account of a person.
Banks have to report any cash payment of Rs 10 lakh or more in a financial year for purchase of bank drafts or pre-paid instrument issued by RBI.
The aforesaid list is just pertaining to cash transactions. Other high value financial transactions through banking channels are also tracked which are not included in the list above.
PAN mandatory for specified transactions
In addition to the above, quoting PAN is mandatory for transactions exceeding specified limits. Refer this Government Press Release specifying the types of transactions and the limits when quoting PAN becomes mandatory.
Penalty provision in Income Tax for concealment
Upto Assessment Year (AY) 2016-17, Section 271(1)(c) provided for penalty in case of concealment of income. The penalty was minimum 100% & maximum 300% of the tax sought to be evaded. The words used in this Section were “concealment
