Compliance Portal’s e-Campaign: Many taxpayers are receiving this message from the income tax department:
“Attention ABC, (PAN -XXXX) Income Tax Department has identified certain information related to high value transactions, which does not appear to be in line with the Income Tax Return filed by you for the Assessment Year 2023-24 (relating to FY 2022-23). You can view the information on compliance portal. Please submit your response online under e-Campaign tab on Compliance Portal or revise your ITR. After login to the e-filing Portal (https:// www.incometax.gov.in), please go to “Pending Actions” tab and click on “Compliance Portal”. On Compliance Portal, navigate to “e-Campaign tab” and view campaign type “High Value Transactions” to submit response. If the information has been correctly accounted for in your ITR, you may ignore this message. Thank you, – Income Tax Department”
The income tax department has sent mass messages to ITR filers relating to high value transactions. However, one need not worry they just have to verify AIS to check whether the same has been disclosed in income tax return correctly, check your high-value transactions and submit a reply ASAP or file revised returns before 31 December.
It is legally required of all taxpayers, whether they are individuals or corporations, to pay income tax. The income tax department tracks people who underreport their income or fail to file an income tax return (ITR) using a variety of analytical techniques. Additionally, in order to keep track of this, the IT department gets in touch with banks and other government agencies to find out who is spending a lot of money but isn’t filing their taxes or is underreporting their income.
The Income Tax Department finds these high-value transactions that could be used for money laundering or tax evasion using a number of methods. The government has set up a compliance portal where taxpayers can submit their answers to high-value transactions in order to guarantee compliance with these regulations.
The Income Tax Compliance portal offers taxpayers an easily navigable platform to ensure timely and accurate submission of their responses. Taxpayers are required to submit responses with accurate and comprehensive information about their high-value transactions. Respecting the high-value transactions notice is essential as it helps create an equitable and effective tax system that is beneficial to all. In summary, completing the high-value transactions notice is essential to paying taxes and staying out of trouble with the law. The Income Tax Compliance portal offers a great way to quickly and effectively complete these requirements.
What Are High-Value Transactions?
Large-scale financial transactions are classified as high-value transactions, and banks and other institutions are required to report these transactions to the Income Tax Department once they reach a specific threshold. The Income Tax department keeps a close eye on these transactions using the idea of a reportable account in Form 61B or a statement of financial transaction (SFT) in Form 61A, which are submitted by particular entities. Information regarding specific high-value transactions that these entities registered, documented, or kept track of during the fiscal year must be provided. This makes it possible for the Income Tax Department to monitor a person’s financial activities and make sure they are paying their taxes.
A few instances of high-value transactions are as follows:
The list of transactions that banks, government agencies, mutual fund houses, and businesses report to the Income Tax Department on Form 61A, also called the Statement of Financial Transactions (SFT), is provided below.
- cash deposits or withdrawals from savings bank accounts totaling more than Rs. 10 lakh during a fiscal year.
- cash deposits or withdrawals from current accounts totaling more than Rs. 50 lakh during a fiscal year.
- In a fiscal year, more than 10 lakh rupees are deposited into a fixed deposit account.
- In a fiscal year, sales or purchases of real estate surpass 30 lakh rupees.
- cash investments in stocks, bonds, mutual funds, and debentures totaling more than 10 lakh rupees during a fiscal year.
- paying credit card bills in cash totaling more than Rs. 1 lakh during a fiscal year.
- exceeding 10 lakh in payments made with any method other than cash for credit card debt during a fiscal year.
- Sale of foreign currency of more than 10 lakh rupees in a fiscal year.
- High-value transactions include the purchase of jewelry, white goods, paintings, marble, domestic business-class air travel, tuition payments or donations, and electricity consumption exceeding Rs. 1 lakh in a fiscal year. The Income Tax Department may send you a notice for these types of transactions.
How is high-value transaction tracking handled by the Income Tax Department?
Have you ever wondered how your high-value transactions are monitored by the tax department? They do, however, have access to the financial information that they gather from various banks and government agencies. Here are some ways they can keep an eye on your transactions and identify any instances of tax avoidance or evasion.
- Have you ever wondered how the tax department keeps an eye on your high-value transactions? However, they do have access to the financial data that they compile from different government and bank sources. These are some of the ways they can monitor your transactions and spot any instances of tax evasion or avoidance.
- Comparable to the prior report, the Statement of Financial Transactions (SFT) covers a broader range of transactions, including credit card payments, foreign exchange transactions, stock and bond purchases, insurance policy purchases, and purchases of gold and silver. Depending on the type of transaction, different reporting thresholds apply; however, transactions under the threshold fall between 50,000 and 10 Lakh.
- Tax Deducted at Source (TDS): This occurs when the payer deducts a portion of the tax from the payee’s payment and deposits it in the payee’s name with the income tax department. For example, if your salary is credited by your employer, the tax will be subtracted and paid to the appropriate tax authority. Details regarding the TDS can be found on your Form 26AS, which is an overview of all your tax credits.
- Similar to TDS, Tax Collected at Source (TCS) refers to the process by which vendors of goods or services gather and deposit sales tax from their clients with the income tax department. For example, the seller will charge you 1% tax and submit it to the tax department if you buy an automobile for more than 10 lakh. The TCS data is also included on your Form 26AS.
- To disclose your income, deductions, paid taxes, and claimed refunds, you must file an income tax return (ITR) every year. The tax department can confirm your income sources and spending patterns by cross-referencing the information on your ITR with information from AIR, SFT, TDS, and TCS.
Here are a few benefits of adhering to Income Tax regulations:
- Avoid Penalties: Complying with regulations pertaining to high-value transactions helps taxpayers stay out of trouble with the law by preventing penalties and fines that the government may impose. These fines can be significant and have a negative effect on a taxpayer’s financial situation.
- Sustain a Positive Image: Adhering to rules helps taxpayers establish and protect a positive image within their sector. It is evidence of their dedication to honest and responsible financial transactions.
- Prevent Legal Hassles: Compliance with regulations is essential in preventing legal troubles such as investigations and scrutiny proceedings initiated by regulatory authorities. Such proceedings can be costly and time-consuming.
- Assure Financial Stability: Transparency and accountability in a taxpayer’s financial transactions are key components of financial stability, and high-value transaction compliance helps to achieve this
- Encourage Investor Confidence: By exhibiting their honesty and openness in financial dealings, taxpayers who abide by regulations can encourage investor confidence. This may improve the likelihood of drawing in funding and growing the company.
Who Receives Email/SMS Of e-Campaign From Income Tax Department?
The income tax department uses an e-campaign to send identified taxpayers emails or SMS messages to confirm their financial transactions in relation to data that the IT department received from a variety of sources, including SFT, TDS, TCS, and other sources. Through a variety of third parties, the department can obtain data about GST, imports and exports, and transactions involving securities, derivatives, commodities, and mutual funds.
You may receive an email/SMS from the e-campaign when:
You have not filed your income tax return: Upon receiving such a notice, you must provide feedback even if your income tax return was filed correctly.
Your income tax returns contain errors or inadequacies: Disparities don’t always mean that something has been kept secret. Alternatively, it might be the result of AIS errors. Kindly notify the IT department of any errors by ‘Providing feedback on AIS’.
How to submit Responses in the Compliance Portal
Are you a taxpayer trying to find an easy way to send the Income Tax Department answers about high-value transactions? The Income Tax Compliance portal is the only place to look! By enabling you to submit your responses online without ever having to set foot in the Income Tax Department’s office, this user-friendly platform aims to simplify your life. But specifically, how do you submit your responses using the portal? Here’s a detailed how-to:
Step 1: Income Tax Compliance Portal Login
Taxpayers can use their PAN number and password to access the Income Tax Compliance portal. The ‘forgot password’ option allows the taxpayer to create a password if they don’t already have one.
Step 2: View the High-Value Transaction
After logging in, taxpayers can view the high-value transaction reported by the Income Tax Department by clicking on Pending actions, then on the Compliance portal, and then on E Campaign.
Step 3: Select the relevant e-campaign
Once you’ve arrived at the e-campaign portal landing page, you can choose the appropriate e-campaign by clicking on “Provide feedback in AIS.” The message “No Compliance Record has been generated for you” will appear if you do not currently have any active e-campaigns or e-verifications.
Step 4: Select information Category
An “E” mark can be seen against the information category for which you have received the communication. E means expected.
Step 5: Submit the Response
From the options, select the most appropriate response:
- Information is correct
- Information is not fully correct
- Income is not taxable
- Information relates to other PAN/year
- Information is duplicate/included in other displayed information
- Information is denied
The response will be sent to the Income Tax Department for further processing.
That’s how easy it is! Do not hesitate to use the Income Tax Compliance portal whenever you need to submit responses pertaining to high-value transactions and income tax because it is meant to make your life easier. Furthermore, you can feel secure knowing that your information is protected thanks to total data security and confidentiality.
Why is it important to submit responses in the compliance portal?
To stop tax evasion and the creation of black money, the Income Tax Department keeps an eye on high-value transactions. In order to stay out of trouble with the law, taxpayers must comply with high-value transactions. Without having to go to the Income Tax Department’s office, taxpayers can electronically submit their responses through the easily navigable Income Tax Compliance portal. Taxpayers can easily and promptly submit their responses in the compliance portal by following the above-mentioned step-by-step instructions. It is significant to remember that responding through the Income Tax Compliance portal is required by law and a responsible civic duty. Taxpayers who abide by high-value transactions support the nation’s economic expansion and advancement. As a result, taxpayers need to monitor their financial activities and provide answers in the compliance portal as and when required.
On the Income Tax Compliance Portal, you can also view your Annual Information Statement, e-Campaigns, e-Proceedings, and DIN Authentication.
Have you received an income tax notice but are unsure about how to reply or what to do next? Speak with the top tax professionals in the area to receive strategically crafted advice based on your unique requirements.
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