How Income Tax Department Is Tracking Your Transactions

swatkats

swatkats

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Income tax authorities have set up an e-platform through which banks and other institutions can report the transactions to them.

From bank deposits to credit card bill payments to property transactions, financial institutions and other entities have to report transactions above a certain threshold to the income tax department.
A January 17 notification from the tax department lists the financial transactions that have to be reported. Income tax authorities have set up an e-platform through which banks and other institutions can report the transactions to them.

Here are 10 key things to know:

1) Banks have to report cash deposits aggregating to Rs. 10 lakh or more in a financial year, in one or more accounts (other than a current account and fixed deposit) of a person.

2) Fixed deposits other than renewals of a person aggregating to Rs. 10 lakh or more of a person in a financial year have to be also reported.

3) Cash payments of Rs. 1 lakh or more for credit card bills have to be reported. Also to be reported is payment of Rs. 10 lakh or more made by any mode (including cheque or wire transfer) to settle credit card dues in a financial year.

4) The tax department also reiterated its November 2016 instruction asking banks to report all cash deposits of Rs. 2.5 lakh or more made in one or more accounts of a person during November 9 to December 30, 2016.

5) For current accounts, banks have to report deposits of Rs. 12.5 lakh or more during the period. After demonetisation of old 500 and 1,000 rupee notes, the government had allowed the junked currency to be deposited in bank accounts during a 50-day window ending December 30, 2016.

6) Cash deposits during April 1, 2016, to November 9, 2016 in any account that are reportable should also be intimated to the tax authorities by January 31, 2017, the notification said.

7) Companies or institutions have to report receipt from any person an amount aggregating to Rs. 10 lakh or more in a financial year for acquiring bonds or debentures.

8) A similar limit is also set for reporting purchase of mutual funds units or buyback of shares.

9) Purchase of foreign exchange including travellers cheque and a forex card aggregating to Rs. 10 lakh will have to be reported to tax authorities.

10) Property registrars will have to report to tax authorities purchase or sale by any person of immovable property for an amount of Rs. 30 lakh or more.

http://profit.ndtv.com/news/budget-...artment-is-tracking-your-transactions-1650793


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Deposited over Rs 2 lakh after demonetisation? You may get multiple tax notices

People who deposited huge amounts of cash in their bank accounts after the Centre’s demonetisation exercise may get multiple notices from the Income Tax department through the rest of the year.

The department – which has started sending notices to those who deposited currency over Rs 2 lakh after November 9 – directed its officials to ensure that “genuine” cases are dissolved at the earliest. Probes would then be undertaken against those found to have “fuzzy” sources of income. The mammoth exercise could go on till the next financial year, sources said.

The first set of notices from the department will be sent out by the end of the financial year. Based on the response, taxmen will decide if they should conduct further investigation into the case. Several banks — public as well as private — will also receive queries about suspicious transactions.

“While the tax department aims to send out all the notices by March, the next sets of queries will depend on their response. It could even vary from person to person,” a senior government official told Hindustan Times on the condition of anonymity.

Sources said the income tax department was also in a hurry to resolve cases that were pending before the demonetisation drive was launched.

By using risk-based data analytics of cash deposits in bank accounts to distinguish between genuine and not genuine cases, the tax department has become capable of targeting even entry-level operators. The department also said cash-withdrawal restrictions have helped them follow the trail of transactions carried out by those with unknown sources of income.

Source: http://www.hindustantimes.com/india...tax-notices/story-f8mWFcQN1Fr2Xvt2qvz6gN.html
 
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yashvisent said:
New I dont understand as why are being being looked upon as thieves.
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Modern govt is sophisticated theft. Taxes are the among the least harmful forms of the govt stealing.

Big thieves, in general, do not like small thieves.

swatkats said:
Even US IRS & Canada CRA are pretty cool than our Income tax department.
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Are you sure? US IRS is quite notorious. I still haven't heard of Indian tax dept being used by govt to go after the small guys because of their political beliefs.[DOUBLEPOST=1485097036][/DOUBLEPOST]https://en.wikipedia.org/wiki/IRS_targeting_controversy

I remember one friend in US whose employer was asked to throw him because there were some problems in his tax returns.
 
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Why blame the IT dept when its the people and the govt at fault. 97% of the people in the country do not file ITR and its not just because they don't have a taxable income, but in many cases because they are not in the radar. Of that 3% that do file ITR, less than a third pay any taxes which brings it to < 1% of the population. Even in that small fraction of people who do pay taxes, how may actually pay and file taxes honestly and not just to the extent they are being forced to because of TDS?

In my entire career of over 12 years in software industry, forget meticulously factoring in every single income source, apart from myself, I haven't met a single person so far who doesn't produce fake receipts for all the exemptions that could be availed. Rent receipts for 40~50k while living in their own house, fake LTA, fake medical etc, 80G. Heck, there were people who procured fake disability certificates to use for exemptions. People in the same income group as myself pay less than half the taxes I pay and they look at me like I am a fool for not using fake receipts for tax evasion. Further, when only a few people are paying the taxes, they have to be made to pay a lot of it.

People vote for tax evaders like those in the current govt or the previous one and even try to justify their corruption and tax evasion even as they talk about anti-corruption. When I say that somebody like Nitin Gadkari has never paid taxes in his whole life while holding thousands of crores in black money and lavishly using it even during the demonetization drive, they try to justify it by saying that somebody in congress is even worse. Another person went so far as to say that that since BJP is the only nationalistic or patriotic party in the country, it is fine if their politicians indulge in tax evasion.

People themselves don't want their politicians to be completely clean because most of the people are dirty themselves.

So, while I don't like being treated like thieves, I fully understand that a majority people of this country completely deserve to be treated like thieves.

But then, we also need to see that IT dept in our country is completely a puppet of the govt. So their actions will also be selective. They will never touch somebody like Nitin Gadkari ever, but will go after the smaller fish. Personally, I fully support what ever fish they catch as long as do it without unnecessarily harassing what few honest folk remain in the country.
 
why not track the transactions before Nov 8 ... say from Jan 2016 till now ??? they will not i guess :p ........... most of the political n influenced peopel knew it already abt DEMO..
 
Strange thing I had a very wrong notion about the IT department before I went there for a problem. For me the IT department had issued two PAN numbers by mistake couple of years back which I was not aware. All my salaried taxes were paid in one PAN number whereas it did not reflect in the IT department books as they had another PAN number registered. I got a notice from them for not paying taxes and filing the return but the taxes were paid in another PAN number and returns filed. I had to explain to them in detail and it took around 6 months for me to convince them of the mistake they had made. They had kept hold of the refund amount that I had received but later released when they came to know that taxes were paid in a different PAN number. During this time I had met several officials, some of them very helpful and others ignorant and indifferent.
 
swatkats said:
Even US IRS & Canada CRA are pretty cool than our Income tax department.
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No they aren't. They collect even more data than what Indian Tax Department has. Still look at the limits really 10 lakh is the least I can see. When government goes and removes gas subsidy for people having reported income of 10lakhs no one bats an eyelid because it is easy to under report income. But if the same limit transactions are to be reported government is looking as thieves?
 
Lord Nemesis said:
97% of the people in the country do not file ITR and its not just because they don't have a taxable income, but in many cases because they are not in the radar. Of that 3% that do file ITR, less than a third pay any taxes which brings it to < 1% of the population.
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Source for this?

I will be shocked if this is actually true.. Since in my 6 years of experience in the software industry, I have seen all my colleagues filing ITR every year.. There will be a lot of last minute panic, but in the end everyone does file ITR..
So its tough to visualize that only 3% of the country are filing ITR and only 1% of the population is paying taxes..
Then is it enough money for the government to run and add to that the amount of money the politicians are embezzling..
 
^^ Then get ready to be shocked.

You will find several sources if you google. The source for the news sites is reports released by IT dept (which you can also look up online) and other data released by govt.

http://indianexpress.com/article/in...-tax-over-5000-pay-more-than-1-crore-2779065/
http://indiatoday.intoday.in/educat...ublic-first-time-10-disclosures/1/656806.html
http://profit.ndtv.com/news/budget/...-pay-income-tax-you-will-be-surprised-1274917
http://www.deccanherald.com/content/299566/less-3-percent-file-income.html

http://www.incometaxindia.gov.in/Pages/Direct-Taxes-Data.aspx

Here are 10 important revelations derived from the data released by the country's Income Tax Department:

1. The number of tax payers has increased by 25 percent since fiscal 2011-2012, the year 2014-15 saw a rise to 5 crore tax payers from 4 crore registered income tax payers three years ago

2. Despite the growth in number of income tax payers, the growth rate in the income tax has shown a steady fall. The growth rate registered in 2010-11 was 18 percent, which is almost three times the growth rate recorded in 2014-15 i.e. 6.7 percent.

3. The direct tax collected in 2015-16 amounted to Rs 7.42 lakh crore in comparison to Rs 4.46 lakh crore collected in 2010-11

4. Only one percent of the total Indian population paid tax for assessment year 2012-13, but 5,430 individuals paid more than Rs 1 crore as direct tax.

5. The three individuals in the top-bracket of Rs 100-500 crore paid a total tax of Rs 437 crore, which raises the average tax outgo to Rs 145.80 crore

6. A total of 17,515 individuals registered a salary range of Rs 1-5 crore, whereas only six individuals fell in the high-end earning bracket of Rs 50-100 crore of salary income

7. According to the data disclosed by the income tax department, around 1 lakh individuals, who filed return for 2011-12, showed nil income.

8. The report suggests that 4.28 lakh return filers had an income that was more than Rs 20 lakh in the year 2011-12.

9. In the same period, a total of Rs 3.89 lakh crore was accounted as direct tax. Around 66 percent of the amount ( Rs 2.56 crore) was sourced from 21,819 entities. These 21,819 entities accounted for only 0.07 percent of the total 311 lakh return filers

10. Maharashtrais credited with the highest collection of direct tax which also includes corporate tax. The state registered a total of Rs 2.77 lakh crore in taxes which was followed by Delhi that registered a total of Rs 91,274 crore. Delhi was followed by Karnataka, Tamil Nadu and Gujarat respectively.
 
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The numbers are astonishing.. Imagine the tax amount that could be collected if all valid income money is accounted for..
If that happens, then I feel it would result in govt reducing the tax slabs further for the regular and normal tax payers like us..
 
swagatrath said:
Source for this?

I will be shocked if this is actually true.. Since in my 6 years of experience in the software industry, I have seen all my colleagues filing ITR every year.. There will be a lot of last minute panic, but in the end everyone does file ITR..
So its tough to visualize that only 3% of the country are filing ITR and only 1% of the population is paying taxes..
Then is it enough money for the government to run and add to that the amount of money the politicians are embezzling..
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You do realize software professionals are the worst examples in this case. Companies have to deduct tax before paying salaries or tax deducted at source (TDS). Many people don't have this like the Uber driver, vendor selling juice in your office canteen, the tapri (small shop) outside campus selling cigarattes, your doctor etc. They have to self declare and pay tax honestly. How many do that? Next time try asking these guys.

And to add to this, software professionals are also not above blame. While they file tax returns, some are involved in shady practices. Couple of years ago at an IT company, many people got hold of a doctor's notepad and used it to generate bills for 80DDB ie expenses for treatment of life threatening diseases. Many were caught and fired for this.
 
sharktale1212 said:
You do realize software professionals are the worst examples in this case. Companies have to deduct tax before paying salaries or tax deducted at source (TDS). Many people don't have this like the Uber driver, vendor selling juice in your office canteen, the tapri (small shop) outside campus selling cigarattes, your doctor etc. They have to self declare and pay tax honestly. How many do that? Next time try asking these guys.
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Why is it only software professionals..? Anyone working in a company undergoes TDS.
 
asingh said:
Why is it only software professionals..? Anyone working in a company undergoes TDS.
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because the quoted post was basing his/her world view on what they see around them ie software professional colleagues filing proof documents in Dec/Jan period. I do understand many, but not all, people working in companies have to go under TDS. There are even third party software contractors which are exception to the norm.
 
sharktale1212 said:
And to add to this, software professionals are also not above blame. While they file tax returns, some are involved in shady practices. Couple of years ago at an IT company, many people got hold of a doctor's notepad and used it to generate bills for 80DDB ie expenses for treatment of life threatening diseases. Many were caught and fired for this.
Click to expand...

Not sure which is the lesser deed here.. Getting fired while trying to reduce an extra 15k from getting taxed or people who don't pay them at all..
Anyways reading the above content, I'm still shocked to comprehend that only 22lakh people actually paying taxes whereas about 25lakh cars are being sold in the same year..
 
Till a while back, there were only a few sectors where salaries were decently high enough to garner IT dept's attention. Also, many private companies outside IT industry and a few in the IT industry as well use various ways to avoid TDS. For instance, if the salary of an employee is 80k. They will pay 20k through bank with necessary TDS and give the rest in cash. This way both the employers and employees are dealing in black and avoiding taxes.

Anyway, another tidbit

http://timesofindia.indiatimes.com/...n-58-of-total-wealth/articleshow/56586277.cms

As per this, 58% of the wealth in India is in the hands of 1% people in the country. I assume this is based on accounted wealth and does not include black money.

But on the other hand less than 1% people pay taxes in the country. Most of the politicians just like Nitin Gadkari do not pay any taxes at all while holding thousands or lac's of crores of black money.
 
https://www.techenclave.com/communi...ut-of-circulation.182218/page-19#post-2109814

Posted it before. Estimated to have spent about 200 crore for his daughters lavish wedding with 10,000 guests and over 50 chartered planes used to bring many guests. Similar lavish spending for his son's wedding in 2009.

As per his own self declared affidavit (you can look at the scanned copy on EC website), he filed ITR in 2008 stating his annual income is 44,000 and in 2013 he stated his income as 2.47 lac. Even his assets are shady numbers. He has never once paid income tax in his life based on the pattern of his ITR's.

Point to be noted is that he is not the only one. If you look at affidavits of various politicians, they either do not pay taxes at all or pay very little while holding crores of black money and leading lavish life styles.
 
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