New Delhi Income tax payers will not be required to provide information about transaction of large amount in their income tax return. Officials aware of this development gave information about this. An official said that ‘there is no proposal to amend the Income Tax Return Form’. He said this about some media reports. In media reports it was said that the payment of more than Rs 20,000 to the hotel in a year, payment of life insurance premium of more than Rs 50,000, payment of more than Rs 20 thousand as the premium of health insurance and Donations of more than one lakh rupees and payment of school / college fees are proposed to be included in ‘Reportable Financial Transactions’.
Any extension in reporting under the Statement of Financial Transaction (SFT) would have meant that financial institutions would have been required to report such transactions to the Income Tax Department.
According to the Income Tax Act, only the third party has to give information of high value transactions to the Income Tax Department. Such information is used to mark people who do not pay the tax due.
In this context, an Income Tax official said, “There is no proposal to amend the Income Tax Return Form.” Taxpayers are not required to provide high value transaction information in their returns.
Sources associated with the Finance Ministry said that there is a provision in the Income Tax Act to quote PAN or Aadhaar number for high value transactions and report by third party.
A source said, “The fact is that the number of tax payers in India is very low and the people who should actually pay tax are also not paying tax.”
It stated that the Income Tax Department is relying heavily on voluntary compliance and thus data on expenditure from third parties through SFT is the most effective non-intrusive way of catching tax evaders.