Taxpayers need not file big money spends in ITR, data to be collected from third parties

The proposed list of transactions was posted on Twitter by MyGovIndia, which later deleted the tweet.

Meanwhile, the RBI said on a year-on-year (Y-o-Y) basis, non-food bank credit growth at 6.7 per cent in July 2020 was the same as in June 2020 but lower than the growth of 11.4 per cent in July 2019. (File)

After a tweet by MyGovIndia and other government Twitter handles on Thursday revealed the proposed expansion of reportable financial transactions to include hotel payments over Rs 20,000, life insurance premium payment over Rs 50,000 and health insurance premium payment over Rs 20,000, donations and payment of school/college fees over Rs 1 lakh a year, a Finance Ministry official on Sunday said the information on these transactions would be collected from third parties and the taxpayers will not have to file this information themselves in the income tax return (ITR).

The proposed list of transactions was posted on Twitter by MyGovIndia, which later deleted the tweet. The graphic detailing the new list, however, still remains on the social media platform from other government handles on Twitter including from Minister of State for Finance Anurag Thakur, regional Press Information Bureau handles, and those of Indian embassies such as ‘India in Qatar’ and ‘India in Ireland’.

The Indian Express had reported Friday that the Income Tax Department, with an aim to widen the tax base, proposes to bring more transactions such as domestic business class air travel, purchase of white goods, jewellery and paintings over Rs 1 lakh under its scanner. The release of the new list had coincided with the launch of ‘Transparent Taxation – Honouring the Honest’ having faceless assessment, appeals and taxpayers’ charter.

The Finance Ministry official termed it as “the most non-intrusive way” to identify the non-filers who claim income less than Rs 2.5 lakh per annum but spend “big money on various items such as business class air travel, foreign travel, spend big money in expensive hotels and send their children to expensive schools”.

The I-T Department is relying more on voluntary compliance and will not examine affairs of honest taxpayers, the official said, adding, “A person who has made purchases of luxury items or spent sizeable amount for hotel bills are potential taxpayers and should file his/her ITR. No doubt, the third party reporting of high-value transactions made by such non-filers would allow the department to nudge such persons to file their returns and pay their due tax.”

In July, however, the Centre had launched a revised Form 26AS which included high-value transactions from the Statement of Financial Transactions (SFT) from this assessment year. The government had said it has been receiving information about high-value transactions since 2016, but “now, all such information under different SFTs will be shown in the new Form 26AS”. The new list of transactions also could get reflected in Form 26AS going ahead.

“It is stated that the Form 26AS for any taxpayer, from now onwards, will display in part E of the Form, different fields such as, type of transaction, name of SFT filer, date of transaction, single/joint party transaction, number of parties, amount, mode of payment and remarks etc,” a Finance Ministry release dated July 18 had said.