About UPI Transaction limitations

[sohamkolay]

In play store Bajaj pay is an app which gives 15 or 20 rupees cashback on my 1St 3rd 5th transaction of 3500+ with bajaj pay . Because I am a student so I use this cashback for my mobile recharge. I used daily 2 offers so it arround 40 K per day . So if I do this everyday in my SBI account, should I have a risk to get income tax notice for my UPI Transaction.

If I calculate per day 40 Thousand
Per month 12 Lakhs
In annual 1 CR 44 Lakhs

Please reply anyone that is there any risk to get income tax notice

 

[amitvicky]

You know the answer already.

 

[TaxWiser]

In play store Bajaj pay is an app which gives 15 or 20 rupees cashback on my 1St 3rd 5th transaction of 3500+ with bajaj pay . Because I am a student so I use this cashback for my mobile recharge. I used daily 2 offers so it arround 40 K per day . So if I do this everyday in my SBI account, should I have a risk to get income tax notice for my UPI Transaction.

If I calculate per day 40 Thousand
Per month 12 Lakhs
In annual 1 CR 44 Lakhs

Please reply anyone that is there any risk to get income tax notice

Yes, there is a potential risk of receiving an income tax notice if you conduct high-value UPI transactions regularly. Here are some key points to consider:

1. Transaction Monitoring: The Income Tax Department monitors high-value transactions, including those made through UPI. Regular transactions amounting to significant sums, like ₹40,000 per day, can attract scrutiny.​

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2. Taxability of UPI Transactions: UPI transactions are subject to income tax rules. Any amount exceeding ₹50,000 received through UPI apps or digital wallets is treated as a gift and taxed as per the provisions applicable to income from other sources.​

3. Annual Limits: Given your calculation, if you transact ₹1.44 crore annually, this will likely be flagged by the tax authorities. Such high-value transactions should be reported in your ITR to avoid any legal issues.​

4. Cashback as Income: Cashback received from these transactions is considered as income and should be declared in your ITR. If the total cashback exceeds ₹50,000 in a financial year, it is taxable.​

Recommendations:

• Maintain Records: Keep detailed records of all transactions and the purpose behind them.
• Consult a Tax Advisor: It’s advisable to consult with a tax advisor to ensure compliance with tax laws and to understand how to report these transactions properly.
• Report in ITR: Make sure to report all high-value transactions and cashback received in your ITR to avoid any penalties or notices from the Income Tax Department.

Don’t sacrifice your future opportunities for the allure of small gains today. Think long-term and act wisely

(Source: Conversation with Gemini AI, Personal experience of ITR filing)