For tea, vegetables or domestic services, we pay daily from digital platforms like Paytm, Google Pay or PhonePe. These transactions of ₹ 100- ₹ 200 may seem modest, but if they are happening regularly, then by the end of the year, their figure can reach millions-and this can be the basis of the investigation of the Income Tax Department.
If you send ₹ 400 daily, then more than ₹ 1 lakh in a year
Suppose you transfer ₹ 400 to someone every day, then it can reach ₹ 12,000 a month and ₹ 1.44 lakh in a year. If this payment is being made in exchange for a service- such as tuition, freelance project or domestic work- then it can be considered income. In such a situation it is necessary to mention it in ITR (Income Tax Return).
Income tax department keeps an eye on the pattern of transaction
The Income Tax Department not only pays attention to the transaction of large amounts, but also on their pattern. If an uniform amount is constantly coming or sent to an account, it may be a transaction related to service or business. In such a situation, the department can check where and for what purpose these money is coming.
NPCI and bank can get data
This information can reach the Income Tax Department through National Payments Corporation of India (NPCI) and banking system. From this, it can be ascertained how many times, how many and how much money is coming in the account of which person.
Which transactions are not taxed?
If your total annual income is below the tax slab, then there is nothing to worry about- especially when it has gone as spending money, such as milk, vegetables, grocery or household items. But if you are taking money in lieu of service through digital medium, such as tuition, mehndi, freelancing or any other small business, and the income from it goes above the tax limit, then you must include it in ITR.
Give honest information in ITR
Digital India has given us a fast and easy payment facility, but with this accountability has also increased. The Income Tax Department now tracks not only crores of transactions, but also small, regular transactions. So if you are taking payment from Google on Google, Paytm or other apps, it is your responsibility to show it properly and enter itr.
If you want to avoid troubles in future …
Transparency in digital transactions is very important. If you disclosed your income properly in time, you will not have to face problems like notice or penalty. Tax rules are now data-inspected, in such a situation, transparency is the best solution.