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High value transactions on Income Tax radar

High value transactions on Income Tax radar
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High value transactions on Income Tax radar 

Highlights

The central government may have eased tax compliance measures through its 'transparent taxation' initiative but it proposes an extensive drive to enhance the country's tax base by aggressively pursuing reporting of high value expenditure that qualifies persons to disclose their income and pay taxes

New Delhi: The central government may have eased tax compliance measures through its 'transparent taxation' initiative but it proposes an extensive drive to enhance the country's tax base by aggressively pursuing reporting of high value expenditure that qualifies persons to disclose their income and pay taxes.

Accordingly, if a person makes payment to hotels of over Rs 20,000, or pays life insurance premium over Rs 50,000 or purchases white goods, jewellery, marble or paintings, or consumes electricity above Rs 1 lakh per annum, all the expenses would be reported to the Income Tax Department by the entity receiving the payment. "These measures have been introduced so that the country's tax base gets expanded. Only about 6.5 crore people file returns and just about a third or less pay taxes. Some of the transactions were being tracked by the department earlier as well and few more would be done now," said a tax expert from one of the four big audit and consultancy firms, asking not to be named.

The long list of expenses qualifying for proper reporting, also includes payment of property tax exceeding Rs 20,000, business-class airline travel (whether domestic or foreign), deposit of over Rs 50 lakh in current accounts and Rs 25 lakh in non-current accounts, payment of educational fee of over Rs 1 lakh per annum, health insurance premium above Rs 20,000 and share transactions with Demat account, as per a communication from the income tax department.

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