According to the amended provisions of Section 285BA of the Income Tax Act, 1961, some assessees need to furnish an Annual Information Return (AIR) in connection with some specified financial transactions done by them during the financial year to the income tax department.
What is an AIR?
Annual Information Return (AIR) regarding ‘high value financial transactions’ are to be furnished as per section 285BA of the Income Tax Act, 1961 by some persons for some specified transactions done by them during a financial year. The due date of filing such a return is 31st August of the next year. The persons liable to furnish such reports are listed in Rule 114E of the Income Tax Rules, 1962.
Object of the provision:
The object of imposing such provision is to ensure that the assessees give details of all transactions for which information is independently collected from them through AIR. If one compares the essentials of AIR and ITR, he will find a mismatch between the information collected through AIR and ITR. There is no guideline regarding the items to be mentioned by the assessee in the ITR. As such, it might happen that information given in ITR may not be same as that collected through AIR. If such information does not match, the case will be chosen for scrutiny, for the purpose of matching the figures. As a result, the assessees will get notices from their assessing officers for the scrutiny.
Who has to furnish an AIR?
According to Rule 114E of the Income Tax Rules, 1962, Annual Information Return has to be furnished by the following entities:
- A banking company for whom the Banking Regulation Act, 1949 is applicable, for Cash deposits having a total of Rs.10, 00,000/- or more in a year in any savings account of any person in that bank.
- A banking company, for whom the Banking Regulation Act, 1949 is applicable, for payments made by any person against credit card bills of that person, having a total of Rs.2,00,000/- or more in the year.
- A trustee of a Mutual Fund for receiving from any person associated with the affairs of the Mutual Fund authorized by the trustee, a sum of Rs. 2,00,000/- or more for acquiring units of that Fund.
- A company or institution that issue bonds or debentures, for receiving a sum of Rs. 5, 00,000/-or more from any person acquiring bonds or debentures issued by that company.
- A company that issues shares, for receiving a sum of Rs. 5.0.000/-or more from any person acquiring bonds or debentures issued by that company.
- Registrar or Sub-Registrar appointed according to section 6 of the Registration Act, 1908, for purchase or sale of any immovable property by someone having value of Rs. 30,00,000/-or more.
- Any person who is an officer of the Reserve Bank of India and duly authorized by the Reserve Bank of India , for receiving a sum of Rs. 5, 00,000/-or more for bonds which are issued by the Reserve Bank of India.
Who is appointed as an “Annual Information Return Administrator”?
The Director General of Income Tax (Systems) has been appointed as ‘Annual Information Return by the CBDT for administrating the Annual Information Return Scheme.
Who can receive an AIR?
The National Securities Depository Limited (NSDL) has been authorized to receive AIR. It receives the AIR through its network of front offices called TIN Facilitation Centers as well as on-line through its website.
