UPI Payments and Tax Rules: Small digital payments daily can also come on the income tax radar. If someone does transactions like 100-500 continuously, then there can be millions in a year. If the payment is instead of a service, it is necessary to show them in ITR.
Tax on online payment received: Nowadays we send money from Paytm, Google Pay or PhonePe to everyone from tea, vegetables, milk to meds and tutors. This small amount of 100-200 rupees seems to be modest, but have you thought that if this payment is being done every day, then it can reach millions in a year and if it is given or being replaced or taken for any service or work, then it can become taxable income. Now the tax system keeps an eye on the pattern of transactions, not just crores of transactions. If you or your acquaintances are earning through digital payment and are not showing it in ITR, then you can get notice of Income Tax Department in the coming time. In this article, know which digital payments are necessary to show, who can avoid tax notice?
Why is it necessary to mention transactions from UPI payment in ITR?
Suppose, you transfer 400 rupees to someone every day. These are Rs 12,000 a month and Rs 1,44,000 in a year. If this money is being replaced for a service, such as domestic work, tuition, designing, it can be considered income and it is necessary to mention it in ITR (Income Tax Return). This is important because if you honestly disclose income in ITR, the details of digital payments are filled correctly, then you can avoid any notice or penalty in the future.
Which transaction does the Income Tax Department monitor?
The Income Tax Department keeps an eye on the pattern of transactions not only on a large amount, but also. For example, transfer of the same amount in the same account, sending any fixed amount to the same mobile number daily, regular digital payment to one service provider. Such patterns can indicate that income is coming in lieu of service.
Will only UPI transaction be taxed?
If your total annual income tax limit is less than Rs 2.5 lakh, then there is no need to worry, but if you are teaching tuition, taking online projects, running a small business from home or earning money by freelancing and all these payments are being made through Paytm, Google Pay or UPI, then it is necessary to show it in itr. Actually, your digital payment details can reach the Income Tax Department through banks and NPCI (National Payments Corporation of India). Therefore, assuming that small transactions will not be known to anyone, there may be misunderstanding.
