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No Changes In ITR Forms; Taxpayers Not To Provide High Value Transaction Details

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As per sources from the finance ministry, there is no deliberation over implementing changes in the income tax return forms. Also, taxpayers won't need to lists out high value transactions in their income tax returns (ITRs).

No Changes In ITR Forms; Taxpayers Not To Specify High Value Transactions
 

Further the sources clarified that any detailed reporting as part of the statement of financial transactions (SFT) implies that such reporting of high value transactions shall be done by financial entities to the tax department. The clarification comes amid reports that suggest the expansion of statement of financial transactions would lead to filing of high value transactions by taxpayers themselves in their ITR.

Denying the inference drawn to be "totally misleading", source with knowledge on the development said it is a false conclusion.

Under the income tax Act, reporting of high value transactions is to be done by the third party to the tax department. Further, it is considered as the most non-intrusive way of discovering individuals who spend heavily on various purposes such as business class air travel, expensive hotels, send their ward to elite schools and yet refrain from filing tax return claiming their income to be below Rs. 2.5 lakh annually.

Moreover, the income tax department has already provided for the mandatory quoting of PAN or aadhaar for high value transactions and their reporting by the third parties i.e. financial entities for expanding tax base. "It's an open fact that in India, only a tiny segment of people pay taxes and all those who should be paying their taxes are actually not paying their taxes," sources said.

Also, as the tax department is dependent much on voluntary compliance and so expenses data submitted by the third parties as part of SFT is the best as well as efficient and non-intrusive method to get hold of tax evaders, added the sources.

GoodReturns.in

Story first published: Monday, August 17, 2020, 22:30 [IST]
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