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| Prime Minister Modi had Thursday said that people paying taxes in this country are "too less". (Representational) |
Written by Aanchal Magazine , Edited by Explained Desk
The Indian ExpressHotel bills over Rs 20,000, life insurance premium payment over Rs 50,000 and health insurance premium payment over Rs 20,000 along with donations and payment of school/ college fees over Rs 1 lakh a year may come under the scanner of the Income-tax Department as it plans to expand the scope of reportable financial transactions under the Statement of Financial Transactions (SFT).The new list of proposed transactions were released Thursday, a day when Prime Minister Narendra Modi announced measures aimed at easing compliance and rewarding honest taxpayers by launching the ‘Transparent Taxation — Honouring the Honest’ platform.The new list of proposed transactions were released Thursday, a day when Prime Minister Narendra Modi announced measures aimed at easing compliance and rewarding honest taxpayers by launching the ‘Transparent Taxation — Honouring the Honest’ platform.
Which transactions are proposed to be added
As part of the proposed expansion of reportable transactions under SFTs, the following transactions would be under scanner- Payment of educational fee/ donations above Rs 1 lakh per annum
- Payment to hotels above Rs 20,000
- Purchase of jewellery, white goods, marbles, paintings, etc above Rs 1 lakh
- Life insurance premium over Rs 50,000
- Life insurance premium over Rs 50,000
- Payment of property tax above Rs 20,000 per annum
- Electricity consumption above Rs 1 lakh per annum
- Health insurance premium above Rs 20,000
- Deposits/credits in current account above Rs 50 lakh
- Deposits/ credits in non-current account above Rs 25 lakh
- Domestic business class air travel/ foreign travel
- Share transactions/ demat accounts/ bank lockers
The government also proposes compulsory filing of returns by a person having bank transactions over Rs 30 lakh, payment of rent over Rs 40,000 and all professionals and businesses having turnover over Rs 50 lakh.
Banks and financial institutions used to share information about high-value transactions recorded in SFTs with tax authorities.
In July, the government had launched a revised Form 26AS which included high-value transactions from SFTs from this assessment year, which would be now directly visible to the taxpayer at the time of filing of Income-tax returns.
In their SFTs, banks and other reporting financial institutions record details of transactions involving cash deposits aggregating Rs 10 lakh or more in a year, in one or more accounts (other than a current account and time deposit), cash payments made by any person totalling over Rs 1 lakh, and payments of bills for one or more credit card of Rs 10 lakh or more by a person in a financial year.
Further, investment in bond/debentures, shares, mutual funds, buyback of shares exceeding Rs 10 lakh in a financial year, along with purchase or sale of immovable property of Rs 30 lakh and above, by a person are recorded in the SFTs.
What does it imply
The government states these measures are aimed at widening the tax base. For taxpayers, this implies enhanced flow of information to tax authorities.
When implemented, it would also reflect in Form 26AS, the consolidated annual statement showing tax deductions/ collections and advance tax against an individual’s PAN. This would create greater onus on the taxpayers to comply in a voluntary manner.
Prime Minister Modi had Thursday said that people paying taxes in this country are “too less”. While filing income tax returns has increased by about 2.5 crore in the last 6-7 years, only 1.5 crore people pay taxes in a country of 130 crore, Modi had said, asking more people to come forward to pay taxes.
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