Why You Get Scrutiny Notices and you get into Department Radars?

The Answer is AIR (Annual Information Return). Through AIR your High-value Financial Transaction (above Certain Limit) are Furnished to the Income Tax Department by Specified Persons. The ‘specified persons’ and the ‘specified transactions’ are listed in Rule 114E of the Income-tax Rules, 1962. 

Government Aim is to Check Evasion and to Curb Black Money flow. AIRs ultimately help the government to collect information about higher value transactions made by any taxpayers. The collected information is cross-checked against the Income Tax Filing. 

Reported If Exceeds OR equal to

Nature of Transaction (Specified transactions)/Specefied person

Tips

10,00,000

Aggregate Cash Deposits in a year in a savings bank account( Banking Company)

 

50,00,000

Cash deposits and Withdrawl From one or more current account of a person(Banking Company)

 

10,00,000/1,00,000*

Credit Card Payment in the year(Banking Company OR Institution Issuing Credit Card)

*Aggregating to Rs 1 lakh or more in cash 

 

10,00,000

One or More Time Deposits (A Banking Company)

 

10,00,000

Mutual Fund Investment

 

10,00,000

Purchased Bond or Debenture issued by Company or Institutions(Company or Institution issuing Bond or Debenture)

 

30,00,000

Purchase and Sale of Immovable Property (Registrar or Sub-registrar)

 

5,00,000

Purchase of Reserve Bank Bonds

 

10,00,000

Receipt from any person for Sale of Foreign Currency(Authorised Person registered in FEMA act)

 

3,50,000 Return not filled and income is more than exempted limit
TCS Deducted by Seller for a purchase of a vehicle, Gold and ITR not filled
TDS deducted by Employer and ITR not filled
TDS Deducted by any other person for any other income like a commission, Professional Fees, Rent
Property Held Outside India or Beneficial owner of Property
income/Gift received by way of Will or Inheritance and ITR not filled
Difference in STT reported by the Fund manager in share sale purchase and filled in Income Tax Return
Interest/Rent received for the property as compensation and TDS Deducted and ITR not filled
an investment made on the name of Family member
Wrong deduction of investment or Donation claimed
Error in TDS Return filled by your employer/or customer
Declaring Lesser Income in comparison to last year
10,000 Cases involve Earlier Year Assesment and addition of Income in Earlier Year
Non-Declaration of Exempt Income like PPF interest, PF Withdrawl, Dividend etc.
5,00,000 Claiming large Refund in Income tax Return
Taking Double Benefit due to change in Salary
10% Difference in Income Reported by  Employer and Field in ITR





Reason for Tax Notice in Base of Companies / Free Lancers / Small Business 



Declaring Loss in comparison to Last year

10,000 Cases involve Earlier Year Assesment and addition of Income in Earlier Year

5,00,000 Claiming large Refund in Income tax Return


Payment for Expenses made to the related party, not at arm's length price


Declaring Lesser Income in comparison to last year


Mismatch in Sales/Purchase filled with Income tax, and sales filled with Income Tax Department

Major Variation in NP ratio and GP ratio from earlier to the current year

major Variation in GP Ratio and NP ratio reported in Previous Year

major Variation in GP Ratio and NP ratio in comparison to Industry


bogus Bill Given or received and the case open for counterparty

Depreciation claimed wrongly as notified by income tax Department

not comply with the provision of income tax


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