AIR is a Serious Matter (Annual Information Return)
Furnishing an AIR is mandatory for enterprises doing a specific class of transactions registered or recorded under them throughout a particular financial year. According to Section 285BA of the Income-tax Act, filing an AIR is mandatory for high-value financial transactions. If you are an entity or part of the financial ecosystem mentioned below, you are probably among the ones who need to comply with the AIR regulations and rules.
A banking company
A banking company to which the Banking Regulation Act 1949 (10 of 1949) applies
A company or institution issuing credit card
A trustee of a Mutual Fund
An entity managing the affairs of the Mutual Fund
A company or institution issuing bonds or debentures
A company issuing shares through a public or rights issue
Registrar or Sub-Registrar appointed under section 6 of the Registration Act, 1908
A registered body/entity duly authorized by the Reserve Bank of India
Here’s all that you need to know about AIR.
What is Annual Information Return (AIR)?
Have you ever wondered how the Income Tax Department comes to know about the high-value transactions you made or make? It is through Annual Information Return. It is a report on the entire high-value transactions which need to be filed by “Specified Persons” as per the Income-tax Act under Section 285BA.
For easy understanding, “Specified Persons” means similar Institutions listed above. Details are available under Rule 114E of the Income-tax act.
Why should one be worried/consider the importance of AIR?
The income tax department is privy to transactions mentioned below done through any institutions that are supposed to file an AIR. If you have done the below-mentioned transactions, the Income-tax Department might issue a notice asking you to clarify, especially if you have not filed your return or if your IT returns have not considered these transactions.
The type of transactions that get reported in AIR
Cash deposit of Rs. 10 lakhs or more in a given year into any savings account of a person in a bank
Credit Card payments aggregating to Rs. 2 lakhs or more in a year
Investment of Rs. 2 lakhs or more in a year in any mutual fund
Investment of Rs. 1 lakh or more in any company for purchasing shares through public issue or right issue
Purchase or sale of any immovable property worth more than Rs 30 lakhs
Investment of Rs. 10 lakhs or more in a year towards Bonds or Debentures
Purchase of bonds issued by Reserve Bank of India, aggregating to Rs 5 lakhs or more in a year
To conclude, AIRs help our government in seamlessly collecting taxes and achieving transparency and insights into tax assets for the betterment of our country. The system examines information to see whether tax payments are proper through cross-checks of tax filing and tax paid by the income tax assesses in the tax return. As responsible citizens and institutions, be aware of the above transactions and always take note to file your income tax returns on time.
