CA in Jaipur | CA. Yogesh Jangid |ITR Filing 2023 | Company Registration | NGO Registration | Income Tax Raid Cases | Audit | Inc Incroporation | CPA in India | Subsidy | Project Funding | GST | GST Raid Cases | Income Tax Notice Faceless | DRI Cases | https://www.nyca.in ITR Filing 2023 | Company Registration | NGO Registration | Income Tax Raid Cases | Audit | Inc Incroporation | CPA in India | Subsidy | Project Funding | GST | GST Raid Cases | Income Tax Notice Faceless | DRI Cases Sat, 13 Apr 2024 13:21:14 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.1 https://www.nyca.in/wp-content/uploads/2022/08/9060CA_logo_icai-1.jpg CA in Jaipur | CA. Yogesh Jangid |ITR Filing 2023 | Company Registration | NGO Registration | Income Tax Raid Cases | Audit | Inc Incroporation | CPA in India | Subsidy | Project Funding | GST | GST Raid Cases | Income Tax Notice Faceless | DRI Cases | https://www.nyca.in 32 32 Identifying Instances Leading to Income Tax Notices in Real Estate Deals and Credit Card Transactions https://www.nyca.in/identifying-instances-leading-to-income-tax-notices-in-real-estate-deals-and-credit-card-transactions/ https://www.nyca.in/identifying-instances-leading-to-income-tax-notices-in-real-estate-deals-and-credit-card-transactions/#respond Sat, 13 Apr 2024 13:21:14 +0000 https://www.nyca.in/?p=8591 The Income Tax Department meticulously monitors all financial transactions carried out by individuals, utilizing various data sources to ensure adherence to tax regulations.

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Tracking Financial Activities:

The Income Tax Department meticulously monitors all financial transactions carried out by individuals, utilizing various data sources to ensure adherence to tax regulations. Certain transactions may trigger heightened scrutiny from tax authorities.

High-Value Cash Transactions:

The tax department pays particular attention to high-value cash transactions. For instance, if an individual receives a cash deposit exceeding Rs 10 lakh in a savings account within a fiscal year, this could prompt the department to issue a notice seeking clarification regarding the source of funds.

Mandatory Reporting by Banks:

As per the Central Board of Direct Taxes (CBDT) directives, banks are mandated to report instances where an individual deposits Rs 10 lakh or more across one or more time deposit accounts during a financial year, excluding deposits made through the renewal of another time deposit. Additionally, all banks, including cooperative banks, must report cash deposits of Rs 10 lakh or more across one or multiple accounts of an individual, excluding current accounts and time deposits.

Scrutiny of Securities Transactions:

Financial institutions and companies issuing bonds or debentures are obligated to report receiving Rs 10 lakh or more from any individual in a financial year for acquiring such securities. This measure is aimed at detecting potential instances of tax evasion or undisclosed income associated with significant cash movements.

Credit Card Transactions:

Several instances of credit card transactions may trigger Income Tax notices:

  • Cash deposits exceeding Rs 10 lakh for savings accounts and Rs 50 lakh for current accounts, along with substantial withdrawals, may prompt inquiries into the origin and intended use of the funds.
  • Real estate transactions exceeding Rs 30 lakh may come under the scrutiny of the tax department, which seeks detailed information about the transaction and involved parties.
  • Investments surpassing Rs 10 lakh in stocks, mutual funds, or bonds may attract scrutiny if the origin of funds appears inconsistent with reported income.
  • Although the Income Tax department does not actively monitor individual credit card transactions, cash payments exceeding Rs 1 lakh towards credit cards or substantial debt settlements exceeding Rs 10 lakh made in cash may undergo scrutiny and investigation. Ensuring transparency in significant transactions with verifiable fund sources is imperative, as unaccounted cash inflows may trigger investigations.

Mismatch of Declared Income:

Discrepancies between declared income and bank data may prompt notifications from the tax department, highlighting the importance of maintaining accurate financial records.

Foreign Exchange Transactions:

Any purchase of foreign exchange totaling Rs 10 lakh, including travelers’ checks, forex cards, or debit/credit card transactions, must be reported to ensure compliance with tax regulations.

Source: https://www.businesstoday.in/personal-finance/tax/story/real-estate-deals-credit-card-transactions-6-times-one-can-get-income-tax-notice-425280-2024-04-12

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]]> https://www.nyca.in/identifying-instances-leading-to-income-tax-notices-in-real-estate-deals-and-credit-card-transactions/feed/ 0 Recovery of Fraudulent GST Input Credit Surges to 12% in FY24 https://www.nyca.in/enforcement-action-over-rs-2-crore-penalty-imposed-in-gst-violations/ https://www.nyca.in/enforcement-action-over-rs-2-crore-penalty-imposed-in-gst-violations/#respond Tue, 09 Apr 2024 05:13:07 +0000 https://www.nyca.in/?p=8351 The recovery rate in Goods and Services Tax (GST) cases concerning input tax credit (ITC) fraud has significantly increased in FY24.

The post Recovery of Fraudulent GST Input Credit Surges to 12% in FY24 appeared first on CA in Jaipur | CA. Yogesh Jangid |ITR Filing 2023 | Company Registration | NGO Registration | Income Tax Raid Cases | Audit | Inc Incroporation | CPA in India | Subsidy | Project Funding | GST | GST Raid Cases | Income Tax Notice Faceless | DRI Cases.

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The recovery rate in Goods and Services Tax (GST) cases concerning input tax credit (ITC) fraud has significantly increased in FY24. Government sources familiar with the matter informed that the Directorate General of GST Intelligence (DGGI) has managed to recover over 12 percent of the dues, a notable rise from the previous 2-3 percent.

Enhanced Recovery Efforts

  • The DGGI has detected GST frauds amounting to Rs 21,089 crore during FY24, with Rs 2,577 crore already recovered.
  • These improvements come as the DGGI adopts a proactive approach to identify ITC cases early on.
  • Utilizing new tools such as artificial intelligence and data analytics, the department is sharing information with other regulatory bodies for swift fraud detection.
  • The recovery data is anticipated to be publicly disclosed soon.

Challenges in Recovery

  • Despite the arrests of 113 individuals implicated in such frauds, retrieving the fraudulently obtained funds remains a challenge.
  • Many previous ITC cases dating back 4-5 years have witnessed negligible recovery rates due to culprits dispersing ill-gotten gains, complicating the recovery process.

Modus Operandi and Common Traps

  • The prevalent modus operandi involves the creation of counterfeit invoices to avail GST benefits, particularly rampant in sectors like manufacturing and real estate.
  • Fraudulent schemes often entail the creation of shell entities using unsuspecting individuals' Know Your Customer (KYC) documents.
  • These entities then generate fake GST receipts, exploiting loopholes to claim double benefits.
  • Common citizens are also ensnared as fraudsters lure them with promises of loans or other incentives, using their KYC details to establish fraudulent entities.

Conclusion

  • The surge in recovery rates signals a proactive stance against GST frauds, yet challenges persist in retrieving illicitly acquired funds.
  • Enhanced collaboration and utilization of advanced technologies are essential in combating such fraudulent practices effectively.

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