• Income tax basic questions

FIrst I applogize as my english is not too good



1. As a taxpayer suppose I have made some profit in business. But I am not aware of retun filing process. Then I contacted a C.A for filing returns. I have given him all the files , bank statements, bills etc through email. Now on my behalf, he files the return and I verified it. So if Income tax department is not satisfied with mny return, Then in that case who is responsible for wrong retrun filing - me or my C.A  and why according to rule ( It can be easily prooved the documents which are given to C.A by business man are sufficient for filing return) 




2. HIGH VALUE TRANSACTIONS : One or more term deposit (other than renewal) aggregating to Rs. 10 Lakh or above.

What does this rule means. 

Case study :
Suppose some one buy share(equity) of worth 2 lakh on day 1 through bank and next day sell shares (equity) for 2.5 lakh on day 2. After selling of shares(equity), he withdraws the money in the account. In this way his total deposits from bank are 2 crore and total withdraw to bank are 2.05 crore. Profit is 5 lakh 

In the above case will bank report the transactions as High Value transactions?


I know that share company will report. But I am asking will bank report it

3. In case study 2 ,  the  indiviodial, who has done high value trasnaction will have to report in retun or not under HIGH VALUE TRANSACTIONS


4. Capital gain vs Business income from shares( What is frequancy cutoff like 200 transactions, 300 or more)
Asked 1 month ago in Income Tax from Rudrapur, Uttarakhand
1. You are liable to verify your return and check if the return is correct or not. Your CA will not be liable for wrong information.

2. Whether these deposits are in cash or through banking channels?

3. You dont need to report the high value transactions in your income tax return.

4. There is no threshold. It depends upon the multiple factor such as your other types of income, your motive of entering into transactions etc. 

Please feel free to call/ revert in case you need more clarity.

Thanks and regards
Abhishek Dugar
CA CS B.Com 
Abhishek Dugar
CA, Mumbai
2788 Answers
114 Consultations

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Hi,

1. Income tax department will not catch your CA. They will catch you. You can put any indemnification clause in the engagement letter of your CA but i dont think anyone will agree to it beyond their fees.

2. High value deposits in cash are required to be reported by bank. There is no problem if the transactions are through bank.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards
Abhishek Dugar
CA CS B.Com
Abhishek Dugar
CA, Mumbai
2788 Answers
114 Consultations

5.0 on 5.0

Hi

1. CA shall not be responsible for any misreporting or mistake in the income tax return filed on your behalf.

2. No such reporting in income tax return. Make sure the transactions are through banking channels.

3. No reporting.

4. It's not specified. It's decided on the basis of objective, volume and frequency of transactions.
Lakshita Bhandari
CA, Mumbai
1297 Answers
36 Consultations

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Hi,

Please find below the answers to your queries.

1. A CA will not be responsible for any errors/ misrepresentation of facts. It is your ITR and you are responsible for the same. He files on your behalf but that does not change the responsibility.

2. If there are high number of transactions and the amount involved is high. In your case study it is in crores, so there is a high probability that you may get a query from the IT department.

3. I dont think you need to specifically report that. You would just need to pay taxes correctly on the profits earned by you during the year.

4. There is no where specified on the number of transactions.  So that is not a criteria.

Regards,
Nikhil
Nikhil Khanna
CA, Mumbai
566 Answers
3 Consultations

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As the return was verified by you, you would be responsible for all the particulars mentioned in your return of income. If any mistake comes into your knowledge, you can file the revised return or file a rectified reply to the AO. 

High value transactions are part of AiR reporting and that for only specified transactions. In case of SB A/c, if the total deposits in your account will exceeds Rs.10 lacs or 50 lacs in case of current A/c then bank will report such transactions.
Vivek Kumar Arora
CA, Delhi
695 Answers
7 Consultations

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When you Wil get work done from CA ,there are less chances of such error..
Swati Agrawal
CA, Indore
245 Answers

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Hello,

Even if your CA has filed it on your behalf still you shall be held responsible for it. Since you should have made sure the return the CA has filed is correct. You can on the other hand file a complaint against the CA if you have sufficient proofs to prove he has not done his part correctly.

Trust this clarifies your query. 

Feel free to call / get back in case of further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
Rohit R Sharma
CA, Mumbai
2089 Answers
90 Consultations

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No you can't contact income tax department for return filing. You may get the information of tax return prepares on income tax website who are registered with the income tax department.

Abhishek Dugar
CA, Mumbai
2788 Answers
114 Consultations

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Really sorry. But there's no such way to reach out.

The best you can do is to find a good CA to avoid any discrepancies.
Lakshita Bhandari
CA, Mumbai
1297 Answers
36 Consultations

5.0 on 5.0

Dear Sir,

I can understand your pain but entire profession can't be painted with same colour if some other professional has done wrong. You can change the professional. Income tax return preparers are available on the department site.

Vivek Kumar Arora
CA, Delhi
695 Answers
7 Consultations

5.0 on 5.0

There are details of Income tax preparers in the IT Website. My suggestion is to find a good professional who can help you in filing your returns. 

Hope that clarifies.

Regards,
Nikhil.
Nikhil Khanna
CA, Mumbai
566 Answers
3 Consultations

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You can not contact Income Tax department for these but yes there is information of TRP on site,you can get work done from there.
Swati Agrawal
CA, Indore
245 Answers

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