AIR Income Tax Filing
“How does the department come to know about the High Value Transactions?”- A question that keeps popping in the minds of income tax payers. To keep a watch on high value transactions undertaken by the taxpayer, the Income-tax Law has framed the concept of Annual Information Return. Though it is a no-brainer that this has been done by the department to keep a check on black money and tax evasion. The intention behind introduction of the concept of reporting in annual information return is to verify, validate and cross-check the sources of income, tax paid and high-value transactions’ details of the taxpayer.
As per Section 285BA of the Income Tax Act, 1961, it is mandatory for “specified persons” to report “specified transactions” recorded by them during the financial year to the Income Tax Authority. Such reporting is done in Annual Information Return. What constitutes the ‘specified persons’ and the ‘specified transactions’ have been given in Rule 114E of the Income-Tax Rules, 1962.
Taxmuneem provides a better insight on evolving opportunities to help the taxpayers in income tax filings without consuming much time.
Filing of Annual Information return
Any other service mentioned in the package
The completeness and verification of data is responsibility of client
Detail of high value transaction in the specified format.
Login credentials for filing the returns
Any other information required.
2-3 working days after the receipt of data
The filers include individuals and taxpayers undertaking specified financial transactions such as a banking company, trustee of a mutual fund, institution issuing bonds or debentures, company issuing shares through Public or Rights issue, Registrars or Sub-Registrar and duly authorized officer of the Reserve Bank of India.
Every reporting person shall obtain a registration number from the Department to ensure overall compliance with the requirements of Section 285BA.
- A banking company will report if there are aggregate cash deposits of Rs. 10 lacs or more of a person in a financial year in savings bank account.
- A banking company or any other company issuing credit cards will report if the Credit Card bill payment of a person is Rs. 10 lacs or more in a financial year. However, if a person makes such payment through cash of Rs. 1 lac or more in a year, then also it will be reported.
- Trustee of a mutual fund will report if he receives an amount of Rs. 10 lacs or more from a person in a financial year for investing in units of mutual fund.
- An institution issuing bonds or debentures will report if it receives an amount of Rs. 10 lacs or more from a person in a financial year for acquiring bonds or debentures.
- A company issuing shares will report if it receives an amount of Rs. 10 lacs or more from a person in a financial year for acquiring shares issued by the company.
- Registrar or Sub-Registrar will report if any person purchases or sales any immovable property for an amount of Rs. 10 lacs or more.
The Annual Information Return shall be furnished electronically in Form No. 61A latest by 31st May immediately following the financial year in which the transaction is recorded.
As per Section 271FA, Penalty of Rs. 500 per day of default will be levied for not furnishing Annual Information Return. If the person fails to file the statement even after notice by the department, a penalty of Rs. 1000 per day of default will be levied.
Though failure to file AIR attracts penalty on specified persons, but as a taxpayer it does not mean that you escaped tax liability. Even if the transaction is not reported, it can still be tracked by the Income Tax Department.
A taxpayer should check Part E of his Form 26AS and reconcile the same with the actual high value transactions. In case of wrongful reporting, bring it to the notice of Department immediately.
A taxpayer is not required to file AIR. Only the specified persons are responsible for reporting.
No, NIL statement is not mandatory.