“ANNUAL INFORMATION RETURN (AIR) – AN UNTOUCHED ISSUE”
WHAT IS “AIR”?
Section 285BA of the Income Tax Act, 1961, read with rule 114E requires certain specified entities to file an Annual Information Return (AIR) in respect of certain financial transactions entered into by them during the financial year (beginning on or after 01/04/2004) to the IT Authority or any other prescribed authority. In nut-shell, it is a return in respect of 'high value financial transactions'.
SPECIFIED ENTITIES WHO NEED TO FURNISH “AIR”
The specified entities who need to furnish an AIR includes a banking company, a company or institution issuing credit card, a trustee of a Mutual Fund or such other authorized person managing the affairs of the Mutual Fund, a company or institution issuing bonds or debentures, a company issuing shares through public or rights issue, registrar or sub-registrar of immovable properties, officer or any other authorized person of the Reserve Bank of India, etc.
TRANSACTIONS COVERED UNDER “AIR”
- Cash deposits aggregating to ten lakh rupees or more in a year in any savings account of a person maintained in that bank.
- Payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to two lakh rupees or more in the year.
- Receipt from any person of an amount of two lakh rupees or more for acquiring units of that fund.
- Receipt from any person of an amount of five lakh rupees or more for acquiring bonds or debentures issued by the Company or institution.
- Receipt from any person of an amount of one lakh rupees or more for acquiring shares issued by the Company.
- Purchase or sale by any person of immoveable property valued at thirty lakh rupees or more.
- Receipt from any person of an amount or amounts aggregating to five lakh rupees or more in a year for bonds issued by the Reserve Bank of India.
HOW TO FURNISH “AIR”?
The “AIR” is to be furnished in Form 61A in electronic form by all categories of entities required to furnish AIR. AIR in physical form is not permitted.
WHERE TO FURNISH “AIR”?
The “AIR” is to be furnished in Form 61A in digitized form to NSDL, i.e. by uploading it through NSDL-TIN website at tin-nsdl.com
DUE-DATE FOR FURNISHING “AIR”
The due-date for filing “AIR” is 31st August immediately following the financial year in which such transactions are entered into.
CONSEQUENCES OF NOT FURNISHING “AIR”
Non-filing of AIR attracts a penalty of Rs.100/- per day of default as per section 271F of IT Act, 1961.
The I.T. Department in its new Income Tax Returns (ITRs) has included a special reporting column for transactions covered under “AIR”. The assessees involved in any such transactions during the financial year need to report them in the new ITR while filing the return of income. Those transactions will be matched with the AIR’s filed by the specified entities. Further, in cases where assessees fail to report such transactions or in cases of mis-match with the AIR, the assessee might have to suffer from hardships which may include answering to show cause notices or responding to scrutiny notices.
CA. APURVA N. MEHTA