Tax Changes to face from April 2016

Everyone knows that 31st March every year is the time when financial year ended. So people can fill their Income tax till this period. So this year the Income tax department has brought new norms into action. To check and control the menace of black money, the Income Tax department is taking actions from April 2016.

The new rules follow that if any individual transacts money more than a certain limit then it will be straight wards  reported by the banks, property registrars and agencies. Moreover, it has been stated that withdrawal, cash receipts, mutual funds, purchasing shares, term deposit, properties that are immovable and sale of foreign currency are done beyond a certain limit will be reported by the financial institutions. These are things will further be submitted to the tax authorities in a new format. These new rules will be applicable and will be in effect from April 2016.

Some new norms are described below:-

  • The income tax authorities will be reported by the registrar about any buy or sale of the immovable properties whose values will exceed by rupees 30,00,000 (30 lakhs).
  • In the financial year, the bank has to deposit cash of rupees 10 lakhs or more for saving account and the limit for rupees 50 lakhs is for current account in a financial year.
  • If any person makes any payment of 1 lakh or more from a credit card in cash than he has to report it to the tax authorities.
  • If in a financial year the amount of 10 lakhs and more is paid by any other mode in a financial year than the issuer of a credit card had to report it to the taxation authorities.
  • RBI had laid up the norms that everything should be reported if the cash payments of rupees 10 lakhs or more are used for any purchase of bank drafts or for any prepaid instruments which are issued by RBI.
  • Some experts have said that all these norms are used by tax department so that they can easily catch, who escape from paying taxes. It also made easy to verify if an individual has filled the tax return or not. These norms will increase the tax base also.
  • Also, the financial institutions have to report on a very prescribed format about the details of the transactions of high value of the tax authorities. For all this purpose the Form 61A has been introduced.
  • The Form 61A is to be given to the Joint Director of Income Tax online with the digital signature before 31st May of the financial year for which the high-value transaction is recorded.
  • It is also mandatory for the financial Institutions that the records of all these have to be kept for the duration of six years. Within these 6 years, there can be audits for checking for the genuineness of old transactions.
  • The limit is about 10 lakhs and more for the mutual fund houses and any company which issues bonds or shares will also have to follow the new norms of the Tax Department and also have to report if a person amounts to Rs 10 lakhs or more in a year.
  • The PAN details provided by the person have to be verified by the financial institutions. If it is not provided then a declaration has to be taken in a different format with identity details.

These are some norms and changes that is to be seen from April 2016 in taxation department.

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