Before filing your IT return, know about AIS/TIS, SFT and Cash Transaction Limits

In continuation of my earlier post regarding Annual Information Statement (AIS), I would like to share insights regarding Specified Financial Transactions (SFT), Tax Information Summary (TIS), cash transaction limits and how to report SFT.

For your information, the government has also introduced TIS along with AIS for those filing income tax returns. TIS means Taxpayer Information Summary. TIS is the summary of AIS. Consolidated totals of income under various heads is shown in TIS. AIS is more detailed (eg. Bank account type and no. wise details are shown in AIS whereas TIS shows Total Interest Income)

As per Section 285BA of the Income Tax Act, 1961 w.e.f 01-04-2015,https://cmamanjulagutti.blogspot.com/2022/06/httpscmamanjulagutti.blogspot.it-return-AIS-TIS-SFT-HighValueCashtrn.html the following persons are specified entities who are required to furnish a reportable transaction registered /recorded/ maintained by them during the financial year to the income-tax authority. Predominantly, the following transactions are covered as “Specified Financial Transactions“.

Cash Transaction	Reporting person
Cash payments in DD or pay orders or any other instruments in excess of Rs 10 lakhs	Banks including co-operative banks
Time deposits in excess of Rs 10 lakhs	Banks including co-operative banks, Post Office, Nidhi Company, NBFCs
Purchase or sale of immovable property in excess of Rs. 30 lakhs	Inspector General, Registrar or Sub-registrar
Investments in shares, mutual funds, bonds, debentures in excess of Rs. 10 lakhs	RTA, brokerage houses, Mutual fund houses
Purchase or sale of foreign currency in excess of Rs. 10 lakhs	RBI

Specified Financial Transactions pertaining to a Financial Year will get reflected in “Part E” of your new 26AS. Thus, SFT is a tool for the government to identify the transactions that can attract taxes and makes it easier for the government to check whether the taxes are paid / returns are filed by the respective taxpayers.

In nutshell, the Income Tax Department has settlements with multiple government agencies to obtain financial records of individuals. Different entities like banks, brokerages, mutual fund houses, property registrars are required to report to the Income Tax Department all the financial transactions including the high value cash related transactions of the individuals.

Tax payers need to report the high value cash transaction to the Income tax department while filing IT return and also report to the Income tax Department via AIS feedback.

If the high value cash transaction or any other income e.g. Interest, dividend, etc. reflecting in Specified Financial Transaction (SFT) of Annual Information Statement (AIS) or Tax Information Summary (TIS) is incorrect, the tax payer can mention it as incorrect or partially incorrect in the AIS feedback. 

If the SFT transactions mentioned in AIS are correct, the tax on each SFT is to be calculated accurately and paid before filing your IT return to avoid notices and penalties.

The following are the limits of cash transactions:

Transaction	Period	Cash Limit
CASH DEPOSIT
Bank Savings Account	On a Single Day	100000
Bank Savings Account	Financial Year	1000000
Bank Fixed Deposit	Financial Year	1000000
Bank Current Account	Financial Year	3000000
CASH PAYMENT FOR CREDIT CARD BILL
Credit Card Bill Payment	Single Payment	100000
Credit Card Bills Payment	Financial Year	1000000
REAL ESTATE SALE OR PURCHASE	Per Transaction	3000000
INVESTMENT IN SHARES, MUTUAL FUNDS, DEBENTURES, BONDS	Financial Year	1000000

 

In case of exceeding the above limits, the Income Tax Department may send notice to the assesse.