No proposal to include high-value transactions in Income Tax Return, information to be collected from third-parties only: Sources

Sources in the Finance Ministry have said that there are no proposals to modify the income tax returns forms. This comes after several news reports in certain sections of media reporting that the purported Statement of Financial Transactions (SFT) expansion would result in the filing of high-value financial transactions in ITR by the taxpayers themselves.

New Delhi:There is no such proposal to modify income tax returns forms, said the Finance Ministry sources when asked to comment on the news reports that appeared in certain sections of media where it is reported that the purported Statement of Financial Transactions (SFT) expansion would result in the filing of high-value financial transactions in ITR by the taxpayers themselves.

Stating this understanding as “totally misleading”, the sources in the know of the matter said that it is a false conclusion. The taxpayer would not need to mention their high-value transactions in their return. The reporting of high-value transactions to the income tax department is to be done by the third parties under the Income Tax Act.

Also, it is the most non-intrusive way to identify those who spend big money on various items such as business class air travel, foreign travel, spend big money in expensive hotels, send their children to expensive schools and yet they do not file an income tax return claiming that their income is less than Rs 2.5 lakh per annum.

According to Fin Min sources, the Income-tax Act already provides for quoting of PAN/Aadhaar for certain high-value transactions and their reporting by the third parties mainly for the purpose of the widening of the tax base. Currently, for example, the information regarding high cash deposit/withdrawal in bank accounts, purchase of shares, mutual funds, purchase of immovable property, etc., are reported to the I-T Department by the third party.

(Article by Krishnanand Tripathi)