Important Keyword: Source of Investment, E-Verify, Income Tax Compliance, Income Tax Return.
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Tax liability on the Source of Investment
In the realm of tax compliance, understanding the origins of investments is paramount, especially when they involve cash transactions. The Income Tax Act mandates that any unexplained investment is deemed income for the financial year under sections 69 and 69B, necessitating the filing of Income Tax Returns (ITRs). Additionally, investments with potential future income require not only the declaration of the investment itself but also any income generated from it.
When taxpayers encounter verification issues from the Income Tax Department (ITD), prompt action is crucial. Responses to such issues must be submitted online via the compliance portal.
These verification issues often arise through SMS, calls, or emails and can stem from various reasons:
Non-filing of ITR, potentially indicating pending tax liabilities for the assessment year.
Discrepancies between the details provided by taxpayers and the information received by the ITD for the assessment year.
Reporting of significant transactions during the financial year that deviate from the taxpayer’s profile, raising red flags.
To navigate these challenges effectively, taxpayers must be proactive in addressing verification issues and ensuring accurate reporting of investments and income. By adhering to tax regulations and promptly responding to ITD communications, taxpayers can uphold compliance and foster a transparent tax environment.
Verification issue in the computation of tax liability for the source of Investment
Code
Description
Response
A1
Correct Information Value
Amount + Remarks
A2
Out of earlier income or savings
Amount + Remarks
A3
Out of receipts exempt from tax
Exempt income-wise list
A4
Received from identifiable persons (without PAN)
PAN wise list
A5
Received from identifiable persons (without PAN)
Person wise list
A6
Received from un-identifiable persons
Nature of transaction wise list
A7
Others
Amount + Remarks
A8
Unexplained amount
A1- (A2+A3+A4+A5+A6+A7)
A9
Income on above transaction/investment during the year
Amount + Remarks
A1- Total Investment Amount: Declare the total investment made in this section. In cases of co-ownership, ensure to specify your share of the investment, including details such as name, PAN, and the share of other co-owners in the remarks section.
A2- Out of Previous Income or Savings: If any portion of the investment or expenditure originates from previous income or savings, indicate the amount under this category. Additionally, provide suitable remarks in the remarks section.
A3- Exempt from Tax Receipts: Select from the dropdown list below the available exemptions. After selecting the relevant exemption, the value of the receipt will be determined.
Interest income under section 10.
Dividend income under section 10(34).
Long-term capital gains on shares under section 10(38).
Agricultural income under section 10(1).
Share in the total income of a firm/AOP, etc. under section 10(2A).
Income not taxable in India.
Others.
If this option is chosen, the following rows will be displayed:
A4- Received from Identifiable Persons (with PAN): If any amount is received from an identifiable person holding a valid PAN, provide their details as per the following table:
Transaction Type:
Sales
Loan Received
Loan Repayment
Gift Received
Donation Received
Other Receipt.
Transaction Mode (Source of Investment): Choose between ‘Cash’ and ‘Non-cash’. Additional rows can be added by clicking on the ‘Add Row’ button. Ensure to provide suitable remarks.
A5- Received from Identifiable Persons (without PAN): If any amount is received from an identifiable person without a PAN, provide their details as per the following table:
A6- Received from Unidentifiable Person: If any amount is received from an unidentifiable person, provide their details as per the following table:
A7- Others: Specify any amounts not covered in the above-mentioned categories and provide suitable remarks in the remarks section.
A8- Unexplained Amount: This section computes the figure (A1 – (A2+A3+A4+A5+A6+A7)) for which no explanation is provided.
A9- Income on Investments during the Year: Declare the investments made and the income generated from those investments for the particular financial year. If the nature of the business involves frequent transactions, mention the working capital employed and the income earned on the turnover.
Important Keyword: Immovable Property, Tax Liability, Income Tax Returns.
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Tax Liability from Purchase of Immovable Property
In the realm of income taxation, addressing compliance queries regarding the purchase of immovable property is paramount for taxpayers. Here’s a simplified guide to understanding these processes:
Understanding Compliance Queries:
Taxpayers who have purchased immovable property from undisclosed income may receive queries on the compliance portal. According to the Income Tax Act, any unexplained investment is deemed as income for that financial year under sections 69 and 69B.
Key Aspects to Consider:
Valuation Discrepancies: If a person receives an immovable property without consideration or with disclosed consideration lower by more than Rs. 50,000, the difference will be considered as income in the hands of the purchaser.
Pre-Sale Agreements: If a sale has not been executed but an agreement of sale is prepared, provisions of section 50C and 56(2) will apply.
Encountering Verification Challenges:
Taxpayers may receive verification notifications from the Income Tax Department (ITD) via SMS, calls, or emails for various reasons:
Non-filing of Income Tax Returns (ITRs) for the given assessment year, potentially leading to pending tax liabilities.
Discrepancies between taxpayer-provided details and information received by the ITD for that assessment year.
Reporting of significant transactions during a financial year considered abnormal or out of line with the taxpayer’s profile.
Responding to Verification Issues:
Taxpayers facing verification issues must promptly submit a response on the compliance portal. This response should be submitted online by logging into the compliance portal.
Verification issue in the computation of tax liability on the Purchase of Immovable Property
Code
Description
Response
A1
Correct Information Value
Amount + Remarks
A2
Out of earlier income or savings
Amount + Remarks
A3
Out of receipts exempt from tax
Exempt income-wise list
A4
Received from identifiable persons (without PAN)
PAN wise list
A5
Received from identifiable persons (without PAN)
Person wise list
A6
Received from un-identifiable persons
Nature of transaction wise list
A7
Others
Amount + Remarks
A8
Unexplained amount
A1- (A2+A3+A4+A5+A6+A7)
In the intricate landscape of taxation, comprehending the intricacies of immovable property transactions is paramount for taxpayers. Here’s a simplified roadmap to help taxpayers navigate these processes:
A1- Total Investment: Declare the aggregate amount paid for the purchase of immovable property, encompassing the purchase price and associated expenses like stamp duty. In cases of co-ownership, specify one’s share of investment, providing details such as name, PAN, and share of other co-owners in the remarks section.
A-2 Out of Previous Income or Savings: If any portion of the investment or expenditure originates from prior income or savings, it must be disclosed along with the amount in this category. Appropriate remarks are essential in the remarks section.
A3- Expenditure from Tax-Exempt Receipts: Choose from available exemptions to determine the value of the receipt, including interest income, dividend income, long-term capital gains on shares, agricultural income, share in the total income of a firm/AOP, income not taxable in India, or others.
A4- Receipts from Identifiable Persons (with PAN): Detail any amounts received from identifiable persons holding a valid PAN, categorizing them based on transaction type such as sales, loan received, loan repayment, gift received, donation received, or other receipt. Specify transaction mode as ‘Cash’ or ‘Non-cash’, with suitable remarks provided.
A5- Receipts from Identifiable Persons (without PAN): Record amounts received from identifiable persons lacking a PAN, adhering to the transaction table format.
A6- Receipts from Unidentifiable Persons: Document amounts received from unidentifiable persons, following the prescribed table format.
A7- Miscellaneous Expenditures: Declare any amounts not fitting into the above categories in this section, ensuring suitable remarks are provided.
By mastering these concepts and accurately completing property transaction declarations, taxpayers can ensure compliance with tax regulations and foster a transparent tax environment. Diligent adherence to these guidelines is imperative to mitigate potential discrepancies or penalties associated with unexplained amounts.
Important Keyword: E-Verify, Income Tax Compliance, Movable Asset.
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Tax Liability from Purchase of a Movable Asset
In the realm of income taxation, understanding the implications of verification issues is crucial for taxpayers.
Here’s a simplified guide to help taxpayers navigate these challenges:
Addressing Unexplained Investments: Taxpayers often make substantial expenditures on movable assets without filing their Income Tax Returns (ITRs). According to the Income Tax Act, any unexplained investment is deemed as income for the financial year under sections 69 and 69B.
Responding to Verification Issues: Taxpayers encountering verification issues must promptly submit a response. This response is to be submitted online through the compliance portal.
Encountering Verification Challenges: Taxpayers may receive verification notifications from the Income Tax Department (ITD) via SMS, calls, or emails for various reasons:
Non-filing of ITRs for the given assessment year, potentially resulting in pending tax liabilities.
Discrepancies between taxpayer-provided details and information received by the ITD for that assessment year.
Reporting of significant transactions during a financial year deemed abnormal or inconsistent with the taxpayer’s profile.
Verification issue in the computation of tax liability from the purchase of a movable asset
Code
Description
Response
A1
Correct Information Value
Amount + Remarks
A2
Out of earlier income or savings
Amount + Remarks
A3
Out of receipts exempt from tax
Exempt income-wise list
A4
Received from identifiable persons (without PAN)
PAN wise list
A5
Received from identifiable persons (without PAN)
Person wise list
A6
Received from un-identifiable persons
Nature of transaction wise list
A7
Others
Amount + Remarks
A8
Unexplained amount
A1- (A2+A3+A4+A5+A6+A7)
In the realm of income taxation, accurately declaring expenditures is vital for taxpayers.
Here’s a simplified guide to help taxpayers navigate these processes:
A1- Total Expenditure Incurred: Declare the total amount of expenditure incurred in the transaction, such as the purchase of movable property.
A-2 Out of Earlier Income or Savings: If any part of the investment or expenditure stems from earlier income or savings, it should be noted along with the amount in this category. Suitable remarks are also required.
A3- Expenditure Out of Receipts Exempt from Tax: Choose from available exemptions to determine the value of the receipt, including interest income under section 10, dividend income under section 10(34), long-term capital gains on shares under section 10(38), agricultural income under section 10(1), share in the total income of firm/AOP under section 10(2A), income not taxable in India, or others.
A4- Received from Identifiable Persons (with PAN): If any amount is received from an identifiable person holding a valid PAN, provide their details as per the transaction type (sales, loan received, loan repayment, gift received, donation received, or other receipt). Transaction mode options include ‘Cash’ and ‘Non-cash’.
A5- Received from Identifiable Persons (without PAN): For amounts received from identifiable persons without a PAN, provide their details as per the transaction type.
A6- Received from Unidentifiable Persons: Details of amounts received from unidentifiable persons should be provided as per the transaction type.
A7- Other Expenditures: Declare any amounts not covered in the above categories, providing suitable remarks.
A8- Unexplained Amount: Compute the figure (A1 – (A2+A3+A4+A5+A6+A7)) for which no explanation is provided.
By understanding and accurately completing expenditure declarations, taxpayers can ensure compliance with tax regulations and contribute to a transparent tax system. It’s essential to provide thorough explanations to avoid any discrepancies or penalties associated with unexplained amounts.
Taxpayers are required to confirm whether they have filed their Income Tax Returns or not through the e-Campaign platform. This initiative targets individuals who have not yet filed their returns for a specific assessment year and may have potential tax liabilities or obligations to file. Here’s how to submit the response on filing your income tax return:
Navigate to the e-Campaign Non-Filing of Return section.
Follow the provided steps to submit your response regarding the filing of your income tax return.
By following these steps, taxpayers can fulfill their obligations and ensure compliance with tax regulations through the e-Campaign platform.
To submit confirmation on the filing of Income Tax Returns, taxpayers need to follow these steps on the compliance portal:
Access the compliance portal and locate the response column.
Under the response column, choose one of the following options from the drop-down list:
“Income Tax Returns has been filed”
“Income Tax Returns has not been filed”
If “ITR has been filed” is selected:
Provide the following details:
Mode of Filing
Date of Filing
Acknowledgment Number
Circle/Ward and City (applicable only if the mode of filing is paper filed)
If “ITR has not been filed” is selected:
Choose one of the following reasons from the drop-down list:
“Return under preparation”
“Not liable to file return of income”
Click the submit option to confirm the chosen reason.
After submitting the response:
Click on the “Back” option to return to the e-Campaign – Non-filing of return screen.
To complete the response, click on “Information Confirmation” to submit feedback against the provided information.
By following these steps, taxpayers can efficiently manage their responses regarding the filing of ITRs and ensure compliance with tax regulations through the compliance portal.
Important Keyword: Compliance Portal employs Campaign.
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Compliance Portal
The Compliance Portal employs a proactive approach to engage taxpayers through its campaign management system. Through various communication channels like email, SMS, phone calls, notices, and letters, taxpayers are prompted to visit the compliance portal and address identified issues promptly. To access their communication history, taxpayers can follow these simple steps:
Step 1: Log in to the Compliance Portal.
Step 2: Navigate to the e-Campaign History tab after logging in.
By following these steps, taxpayers can conveniently view their interaction history and take necessary actions to ensure compliance with tax regulations.
Hence, by selecting the particular year, you can view the e-Campaign history.
