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Don’t Hide your Income – Income Tax Department knows your Transactions

24
May

Income Tax, Property transaction, TDS deduction
If you think that you can declare less income in Income Tax Return and that Income Tax Department will not be able to find it out, then please correct yourself. There are many ways that Income Tax Department will know your source of income and can catch hold of you for declaring lower income in Income Tax Return. There are financial transactions which IT department has a pre-hand knowledge, even if you don’t declare them in your returns. Examples of such transactions are:

– Any property is sold or purchased:
In case the value of transaction of any property is more than 30 lakhs, then the registering authority will declare the entire transaction details (like name of seller and purchaser, PAN, address, transaction amount etc.) in its Annual Information Return, which can be accessed by IT authority.
Whereas, in case the property transaction value is more than 50 lakhs, then the purchaser has to deduct TDS @1% before making payment to the seller. This TDS is then submitted to the department with 26QB, declaring the PAN of each parties to transaction, sales consideration and TDS deducted for the same, which again is accessible to IT authority.
Hence, the purchaser has to show the source of consideration paid and also the seller has to declare the same in IT as Capital Gain/Loss.

– Transactions in which TDS has been deducted:
Similar to the above, if in any transaction TDS has been deducted, then deducter has to deposit the TDS along with the prescribed form declaring all the necessary details of the transactions as required. this way the IT authority will be aware of the amount paid or received even though the same has not been declared in the IT Return. Few

Examples:

() Bank has to deduct TDS if the interest paid in any account is more than Rs.10,000. So even if the interest income is not declared by the account holder, IT authority has a prior information of the same.

() Similarly, Form 26AS shows the complete details of the TDS deducted by the employer on employees salary along with the complete salary details. This way, you cannot hide any part of your salary from IT authority by not declaring any part of your salary income.

These were just a few instances when IT authorities have a prior information on a person income inflow and outflow. So in either case if there is any kind of misappropriation of income IT authorities have various ways of finding you out. There are various rules applicable to various institutions for declaring the clients details if they meet up given criteria like banks have to declare the PAN and transaction amount to the IT authority if any person deposit cash in saving account above 10Lakhs at any point in any financial year. So people, please be fair and declare your correct income, otherwise there might be huge consequences for not declaring correct income.