I-T radar on high value transactions
Move aims to encourage financial savings and wean people away from using cash as the dominant payment modebusiness Updated: Mar 16, 2016 15:07 IST
India has revised the threshold levels for monitoring credit card spending and investment in instruments such as mutual funds and bonds as part of a wider strategy to encourage financial savings and wean people away from using cash as the dominant payment mode.
Under the new rules, annual credit card spending worth more than Rs 10 lakh will come under scrutiny, a five-fold increase from the earlier threshold of Rs2 lakh.
However, bulk purchases through credit cards worth more than Rs 2 lakh in a single transaction will come under tax scrutiny.
Only those bond and debenture purchases exceeding Rs 10 lakh annually will come under the tax department’s scrutiny, up from the earlier threshold of Rs 5 lakh.
Likewise, the tax department will scrutinise an individuals’ investments in mutual funds if the annual value exceeds Rs 10 lakh representing a five-fold increase from the earlier threshold of Rs 2 lakh. The annual threshold tax scrutiny for investment in shares has been raised to Rs 10 lakh from Rs 1 lakh earlier.
Bank drafts, which were earlier not monitored for tax scrutiny, worth more than Rs 10 lakh will now come under the tax lens.
The threshold for purchase or sale of any immovable property and cash transactions remain at Rs 30 lakh and Rs 10 lakh respectively.
Last year, the tax department had changed norms for mandatory disclosure of permanent account number (PAN) to include most of the transactions under the tax net which came into effect from January 1, 2016.
The government feels that there was a need to revise these limits as a lot of earlier thresholds should now come under the PAN disclosure norms, an official, who did not wish to be identified, said.