Annual Information Return (AIR) of high value financial transactions


Post on 9th Nov 2016 by Pradeep Jain, Director, Paperpink. 

ANNUAL INFORMATION RETURN: Annual Information Return (AIR) of high value financial transactions is required to be furnished under section 285BA of the Income-tax Act, 1961 by specified persons in respect of specified transactions registered or recorded by them during the financial year (read with Rule 114E of the Income Tax Rules, 1962).

Motive of this discussion is to educate people about the benefit of online/Cheque transaction and avoiding cash transactions.

Tabular Summary of AIR Transaction to be reported to Income Tax

Sr. No. Person responsible
to file AIR
Nature of Financial transaction Value Transaction Code
1 Banking company/institution Total cash deposits in a savings bank account in a year Rs. 10 lakhs or more 001
2 Banking company/ institution or any other company / institution issuing credit card Payments received in the year in respect of a credit card issued. Rs. 2 lakhs or more 002
3 Trustee or authorized person of a Mutual Fund Receipt from any person for acquiring units of that Fund Rs. 2 lakhs or more 003
4 Company or institution issuing bonds or debentures Receipt from any person for acquiring bonds or debentures issued by the company or institution. Rs. 5 lakhs or more 004
5 Company issuing shares through a public or rights issue Receipt from any person for acquiring shares issued by the company. Rs. 1 lakh or more 005
6 Registrar or Sub-Registrar Purchase or sale by any person of immovable property Rs. 30 lakhs or more 006/007
7 Authorised Officer of Reserve Bank of India Aggregate receipts from any person for bonds issued by RBI Rs. 5 lakhs or more 008

With respect to the AIR by Banking companies, If you are having sufficient cash in your balance sheet or you have any cash income during the year then you can explain the same to the assessing officer else same shall be treated as Tax Evasion and Tax shall be paid on it along with 200% penalty u/s 270(A).

Further, The government on Wednesday warned that cash deposits above Rs 2.5 lakh threshold under the 50-day window could attract tax plus a 200 per cent penalty in case of income mismatch.

Statement by Government
“We would be getting reports of all cash deposited during the period of November 10 to December 30, 2016, above a threshold of Rs 2.5 lakh in every account.

“The (tax) department would do matching of this with income returns filed by the depositors. And suitable action may follow,” revenue secretary Hashmukh Adhia said tonight.

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