By Admin 
Income Tax Notice: In today’s time, most of the people are completely dependent on UPI payments, net banking and other online transactions. Digital payments are used for every task related to daily life like buying vegetables, milk or any big purchase. In such a situation, a question arises in the minds of many people whether the Income Tax Department keeps an eye on every digital transaction? Can I get a tax notice if I do too many online transactions? Let us tell.
Is every digital transaction monitored?
First of all, it is important for you to know that the Income Tax Department does not look at every small transaction. Banks and other financial institutions send information only about major transactions to the government through Statement of Financial Transactions (SFT).
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These transactions come under the Income Tax Department:
- If Rs 10 lakh or more is deposited in a savings account in a financial year, its information is given to the tax department.
- Cash deposits or withdrawals of Rs 50 lakh or more are reported in the current account.
- If a person pays a credit card bill of more than Rs 1 lakh in cash or pays Rs 10 lakh or more through any means, then this information also reaches the department.
- Investments in fixed deposits, shares, mutual funds, bonds or debentures of Rs 10 lakh or more and purchase or sale of property worth more than Rs 30 lakh are also reported.
- Even if more than Rs 10 lakh is spent on foreign currency or forex card in a financial year, the information is sent to the tax department.
What will happen when the notice comes?
If you are not able to reveal the exact source of a large amount, it can be considered as undeclared income. In such cases, additional tax and penalty may have to be paid. In serious cases, up to 78 percent of tax and penalty may have to be paid. In some cases the department can also reopen old tax records.
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Learn how to avoid notices
There is also a way to avoid this notice from the Income Tax Department, under which maintain separate bank accounts for personal and business transactions. Freelancers and small businessmen should keep complete records of their income. If you receive a large amount of money or a gift from a relative, keep its documents safe. Apart from this, before filling ITR, definitely check AIS and Form 26AS. If any wrong or unknown transaction is seen in these, then inform it through the feedback option available on the Income Tax Portal.