UNDERSTANDING  26 AS FORM WHICH
                               ONE RECEIVES FROM INCOME TAX
                               DEPARTMENT ANNUALLY

              NOW INCOME TAX DEPARTMENT KNOWS EVERYTHING
              ABOUT YOUR FINANCIAL DEALINGS- READ ON
                                  BE CAREFUL

ANNUAL INFORMATION REPORT IS MUCH MORE THAN YOUR BANK
ACCOUNTS AND TAX DEDUCTED

 KINDLY SPARE FEW MOMENTS AND READ IT.

Under section 285BA of the Income-tax Act, 1961, “specified persons”
are required to record and report high-value financial transactions of
individuals.

If you have read your Form 26AS (an annual consolidated credit
statement), you will notice that apart from having details of tax
deducted at source (TDS), tax collected at source (TCS), taxes paid
and refunds,

IT ALSO CONTAINS DETAILS OF THE ANNUAL INFORMATION RETURNS FILED BY
DIFFERENT ENTITIES.  THE AIR COLUMNS LISTS DETAILS OF THE HIGH VALUE
TRANSACTIONS MADE BY TAX PAYER DURING THE FINANCIAL YEAR.  NOW KINDLY
READ ON.

WHO FILES IT?

Under section 285BA of the Income-tax Act, 1961, “specified persons”
are required to record and report high-value financial transactions of
individuals. These specified persons include: banks, mutual funds,
institutions issuing bonds, and registrars or sub-registrars; and they
have to file the AIR, containing details of high-value transactions,
by 31 May of the following year. Earlier it was allowed till 31
August.

WHICH TRANSACTIONS ARE REPORTED?

High-value transactions are those that are above a certain limit.

The list of high-value transactions, for which AIRs have to be filed,
is specified in rule 114E of the Income-tax Rules, 1962.

For instance, a bank has to file an AIR when the aggregate cash
deposits of all the savings bank accounts of a client exceed Rs.10
lakh in a year.

Similarly, registrars or sub-registrars have to file AIRs for every
individual involved in any transaction of an immovable properties
(land, house or building), where the value of the deal exceeds Rs.30
lakh. In case a deal involves joint parties, and the share of one or
more parties is less than Rs.30 lakh, even then AIRs are filed for all
the individuals.

The scope of AIR has been recently expanded by the Central Board of
Direct Taxes (CBDT). For example, effective 1 April 2016, a bank has
to report every person who makes one or more term deposits, which
total more than Rs.10 lakh in a year. The amount excludes renewal or
reinvestment of the deposits.

The threshold of some transactions has changed. For instance, earlier
a credit card issuer had to file an AIR for those whose aggregate
annual spending on a card exceeded Rs.2 lakh. This limit has been
raised to Rs.10 lakh now.

However, now an AIR has to be filed even for those who pay their
credit card bills by cash (instead of making the payment by cheques or
bank transfers), and the total of such payments exceeds Rs.1 lakh in a
year.

Similarly, earlier a mutual fund company had to file AIRs for those
unit holders who had invested more than Rs.2 lakh in a scheme. Now the
limit has been raised to Rs.10 lakh.

AIRs helps the government to collect information about high-value
transactions made by taxpayers. This information is cross-checked
against the income declared and tax paid by the income tax assessee in
her income tax return.

ITS AIM IS TO CHECK TAX EVASION AND CURB BLACK MONEY.

circulated by

NARENDRA AHUJA
MA LLB
PG DIP MANCHESTER 1964
WILL & MUTATION ADVISER
ADVOCATE
9971475800