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Nowadays digital payment has become a part of our everyday life. ₹ 100 to the tea person, ₹ 200 to the vegetable or ₹ 500 in lieu of any domestic service, this transaction is now common. People wonder why someone will watch such a small amount. But if this transaction continues daily, then the picture can change at the end of the year.
Think, if you send ₹ 400 Paytm every day or someone from Google Pay, then it will be ₹ 12,000 a month. This figure is out of ₹ 1 lakh throughout the year. Now if these money is being given or taken in exchange for any service or work, then it can be seen as income and in such a situation it is necessary to mention it in ITR.
Identified by transactions with fixed patterns
The Income Tax Department keeps an eye on the pattern of transaction not only on major transactions. If a person repeatedly sends or receives or receives a fixed amount in different or one account, then it may be an indication that there is any income or service related activity. In such a situation, the department can check where the money is coming from and for what purpose.
The data of bank and UPI apps can reach the Income Tax Department through National Payments Corporation of India (NPCI) and banks. This data helps to explain which accounts are taking place in which accounts. Therefore, a daily payment of ₹ 100 ₹ 200, even if it is small, but if it is getting regular, then it can be seen in the tax authorities.
Do only transactions become the basis of tax?
Just having payment is not the reason for tax. If your total income is below the tax limit, then there is no need to worry about such transactions, especially when they are being spent, such as grocery, milk, vegetables or household use items. But if you are taking payment of service from someone, such as running tuition, freelance project or any small business, then it is necessary to disclose such digital payments as income.
Many people teach tuition on a small level or designing freelance and instead take money from Google Pay or Paytm. If this income crosses the tax limit by joining your total income, then it becomes mandatory to include it in ITR.
It is necessary to give correct information in ITR
The initiative of Digital India has provided facilities, but accountability has also increased with it. Now the Income Tax Department does not only see transactions worth crores, but also sees how many times, where and through which medium is coming from. This has made it clear that the tax system has now become more fine and data-corresponded. If you are paying or getting through digital medium, it would be better to give complete information while filling ITR. There is no possibility of notice or penalty in future due to revelation of income honestly.