PM Narender Modi launched the ‘Transparent Taxation’ platform which aimed to improve tax compliance, reduce the scope for corruption by officially, faceless assessment and ease of filing returns.
The central government has also proposed with an ambition to minimize the threshold of several transactions for tax disclosure. The main object of the ‘Transparent Taxation’ platform is to be widening the income tax base and checking tax evasion.
The list will now include keeping a check on tax evasion, all-white good purchases, property tax, medical and life insurance premium, domestic and foreign business class airline travel, and even hotel bill payments will be also included in this new proposal.
In other words that if next time you pay a hotel bill or medical insurance premium of more than ₹ 20,000, incur an expenditure of amount exceeding ₹ 50,000 on life insurance or more than ₹ 1 lakh for school fee, purchase white goods, jewellery, marble or paintings, be mindful that the institution/organization you have made the payment to will be inform the government about the transactions.
In also addition even the payments made to the government such as property tax and electricity bill will also be reported if they exceed ₹ 20,000 and ₹ 1 lakh, respectively, as per the Ministry of Finance. These will be reflected in Form 26AS, an individual’s tax account statement.
Mehul Sheth, a CA said that “Earlier, a majority of the high value transactions were linked to the financial sector such as banks, Demat Accounts, but now this move aims to bring everyone under the lens. So, even normal payments for school fees and white goods or painting purchases above ₹ 1 lakh would be reported and even bank account deposits would be checked.”
In the existing scenario, purchase of property above ₹ 30 lakh, ₹ 10 lakh invested in shares, mutual funds, demat, credit card, and fixed deposit transactions of the amount above ₹ 10 lakhs were reported.
The limit for cash deposits in banks has also been enhanced from ₹ 10 lakh to ₹ 25 lakh for a savings account and, ₹ 50 lakh for the current account. While if you have made bank transactions above ₹ 30 lakhs then you would have to file a tax return, whether your transaction has been reported or not.
Ameet Patel, partner at Manohar Chowdhry & Associates said that “Government has introduced new sections and is making reporting of certain transactions mandatory to unearth black money. This is because the number of people subjected to scrutiny is being reduced. The tax department wants to say have faith that taxpayers won’t be harassed as they are relying on data analytics.”
He further said that “since June this year, several notices have been issued to taxpayers to confirm whether they have made any high value transactions or not. Notices to confirm transactions reported under the taxpayers’ PAN have already been issued based on the information reported to the government. The taxpayer simply needs to log-in to confirm whether the transactions belong to him or her. Once you verify or decline the transaction, the tax department would cross verify with your income tax returns if any.” Patel explained.