Home > Income Tax > Help Center > High Value Transactions under SFTLast Updated: Sep 30th 2022

High value transaction limits for Income Tax Compliance

Part of new Income Tax Reforms 2020 in India, Honourable Indian Prime Minister Mr. Narendra Modi launched a new initiative to capture all the High Value Transactions (SFT) by the income tax department to widen the tax base in India. This document covers Specified Financial Transactions (SFT) and the minimum transaction limits

Tax Transparency Reforms 2020: Decoding for an Indian Taxpayer ?

1. Why to capture the Specified Financial Transactions ?

While the Income Tax Return Filings have increased YOY for the last 2+ years, the income tax compliance in India is not where it is supposed to be compared to other countries in certain parameters.

The main segment of individual IT Return Filings are from the employees of both private, public sector. To widen tax base, government of India took the initiative to capture the specified financial transactions of certain limits to make sure that the taxpayer is aware and comply.

The series of direct tax reforms in India are much needed to regain the confidence from the honest taxpayers mainly the working-class population.

“It is a win-win for both honest taxpayers and the government where the initiative not only ease the compliance but expected to add more taxpayers to the formal economy and collect more taxes.”

2. Newly added High Value Transactions threshold limits

#Transaction TypeMin. Amount (Rs.)
1Payment to Hotels20,000
2Payment of Property tax per annum 20,000
3Health Insurance premium20,000
4Life Insurance Premium50,000
5Payment of educational fee / donations1 Lakh
6Electricity Consumption per year1 Lakh
7Purchase of jewellery, white goods, painting, marble, etc1 Lakh
8Share transactions in DMAT Accounts / Bank Lockersany
9Domestic class Air travel / Foreign travelany
10Deposit / Credits in non-current Accounts25 Lakhs
11Deposit / Credits in Current Accounts50 Lakhs

3. Existing High Value Transactions threshold limits

#Transaction TypeMin. Amount (Rs.)
1Cash Deposit in Savings Account10 Lakhs
2Cash Deposit or Withdrawal from one or more Current Accounts50 Lakhs
3Term Deposits10 Lakhs
4Purchase or Sale of Immovable Property (House, Land, Apartment etc.)30 Lakhs
5Receipt of Cash for the Sale of Goods / Services2 Lakhs
6Cash Payment for Bank Demand Drafts / Challans 10 Lakhs
7Purchase of Shares / Mutual Funds / Bonds / Debentures 10 Lakhs
8Purchase of Foreign Currency10 Lakhs
9Credit Card Payment in Cash1 Lakh
10Credit Card payment in any mode other than cash10 Lakhs

4. Other Limits added to enforce IT Filing

  1. Provision for the Deduction / Collection of tax at higher rates for no-filers of tax returns
  2. Provision for making Tax Returns Compulsory for taxpayers
    1. Whose bank transactions above Rs. 30 Lakh
    2. All professionals, businesses having turnover above Rs. 50 Lakh
    3. All whose payment of rent is above Rs. 40,000 per month

5. How to know high value transactions recorded for your PAN?

Income Tax Department collects the high value transactions from various sources and record against every PAN (permanent account number). You can check what transactions were identified against your PAN using Form 26AS or AIS (Annual Information Statement) statement.

Want to download Form 26AS ?

Form 26AS is a TDS Credit statement, an important document when filing your taxes. Check @ How to View / Download Form 26AS ?

Want to download AIS Statement ?

AIS is a comprehensive statement containing details of the financial transactions undertaken by you for a given financial year (FY). Different from Form 26AS. Check @ How to View / Download AIS Statement ?

6. How to handle e-Campaign SMS, High Value Transaction Notices?

Starting from 2022, IT Department started sending e-Campaign SMS alerts, and High Value Transaction Notices. Refer Handling e-Campaign SMS, High Value Transaction Notices

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