What is Annual Information Return (AIR) and its Provisions?
A new concept of 'Annual Information Return' (AIR) has been introduced by the department of Income Tax Law of India. It monitors and keeps track of all transactions of high value. Income tax officials with the help of this concept will be able to collect information regarding all high value transactions made by a person in any particular year.
The basic provisions of this Annual Information Return in India are as follows:
- Filers or entities will be required to supply to the income tax officials details of any financial transactions made by them in a particular financial year. If the entity is an office of the government, public bodies or associations then they can include an assesse
- The transactions should be an aggregate value of Rs 50,000 and above.
- When finalised, the rules under section 271F will make certain that those who fail to file transactions of aggregate value more than Rs 50,000 will be fined Rs 100 per day of default
- According to section 285BA(5) the tax authorities will be required to give notice of 30 days to those who have not completed the filing process of their papers .
- Fine of up to Rs 500 per day of default can be levied on the defaulters if they fail to file the returns even after issue of the 30 day notice.
- If the filer notices some inaccuracy in his returns, he can rectify it within 10 days from the date of filing. If the tax authorities detect this inaccuracy, they can issue a notice for the rectification of the inaccuracy within 30 days of the date of filing.
- If the inaccuracy is not rectified then the statement becomes invalid and the person concerned will be treated as a defaulter who has not filed the transaction report. The same individual will be liable to pay a penalty of Rs 50,000.