High Value Transactions


Established 1993


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HIGH VALUE TRANSACTIONS THAT COULD BE INQUIRED by the income tax department

In recent years, it is crucial to remain vigilant as Revenue Authorities have placed increased scrutiny on numerous high-value and cash transactions. The Income Tax Department consistently monitors transactions exceeding a specified limit. Failure to report such transactions in Income Tax Returns (ITR) filing may result in a notice from tax authorities. The Income Tax Department has established a connected data flow, collaborating with various investment platforms such as banks, mutual fund houses, broker platforms, and other entities, including property registering authorities.

Highlighted here are major High Value Transactions:

Sale or purchase of property: Property registering authorities must notify tax authorities of all transactions involving Rs. 30 lakhs or more, whether through sales or purchases.
Cash deposits in Savings & Current Accounts with Banks: Banks, including Co-operative banks, are obligated to report transactions where cash deposits totaling Rs. 10 lakhs or more are made in a savings account within a financial year. The current account threshold is set at Rs. 50 lakhs.
Fixed Deposit Deposits: Banks are mandated to inform the tax department of transactions where an individual deposits Rs. 10 lakhs or more in one or more fixed deposits during a financial year.
Investment in various financial instruments such as shares, mutual funds, debentures, and bonds: Companies or institutions issuing bonds or debentures must report the receipt of Rs. 10 lakhs or more from any individual during a financial year for acquiring bonds or debentures. A similar reporting limit is established for the purchase of shares and mutual funds.
Credit Card bill payment: Any cash payment of Rs. 1 lakh or more towards credit card expenses needs to be reported to the tax department. Additionally, payments totaling Rs. 10 lakhs or more in a financial year fall under the reporting requirement.
Foreign Exchange Transactions: The income tax department must be informed of any receipts from an individual for the sale of foreign currency or expenses paid in such foreign currency, using banking cards, drafts, travellers’ cheques, or any other financial instrument with a value of Rs. 10 lakhs or more.

Therefore, it is imperative for a taxpayer to accurately disclose high-value transactions during the ITR filing process, ensuring precise calculation of the associated tax liability. Any inaccuracies or discrepancies in reporting such transactions could lead to the issuance of an Income Tax notice. The income tax department employs diverse data analysis techniques to identify individuals who fail to file income tax returns or those who underreport their income.

Curated By:

Yash Jain