Avoid unaccounted UPI transactions
Our banking system has also developed a lot by utilising modern gadgets and technologies. The banks have been updated by using the internet and other available modern techniques. A robust and strong banking system is essential for the development of a country and through this, we shall prohibit money laundering. The government of India has also done a lot to bring all cash transactions into the banking system. The government has inserted various incentives and penalties to use the banking system and prohibit the cash system to reduce the generation of black money.
The introduction of a Unified Payment Interface (UPI) is a smartphone application that allows users to transfer money between bank accounts. It is a single-window mobile payment system developed by the National Payments Corporation of India (NPCI). The Unified Payment Interface is a real-time payment system.
Remember that excessive use of UPI and use of UPI for the help of your friends, family members, others may land you in trouble. So keep in your mind below mentioned examples before using UPI and your bank accounts for payment on behalf of others.
A person generally uses his/her UPI for making payment on beheld of others for some benefits of reward points or cash back, but these incentives are not commensurate with the problem you will face in future when you receive notice from Income Tax & GST departments for payment of taxes.
LET’S THE US CONSIDER SOME EXAMPLES FOR UNDERSTANDING THE CONSEQUENCES OF USING EXCESS UPI
1. Mr A is a real estate broker and he is serving his clients through booking as well as registration services. He generally asked his clients to deposit /transfer stamp duty and registration charges in his account maintained by him, from where he is paying registration and stamp duty charges to the government. In Mr, A case supposes his turnover in his bank account during FY 2020-21 was Rs. 2.00 Crores ( approx). In this case, he has crossed the threshold limit of registration of GST and the GST department may ask for GST Payment and registration requirements and also Income tax department asked for details of payment received in his bank account. Mr A in this case has to maintain the KYC of each depositor and each client depositing money in his account and this turnover will be shown in his books of accounts. He has to maintain proper books of accounts.
2. Mr B is an individual and he is helping his friends and family members by paying through his UPI or bank accounts of various transactions and asking his family members/friends to deposit cash /transfer cash to his bank account. In this case, suppose for getting incentive of 1 /2% you have transacted in your bank account up to Rs. 40.00 lakhs or more during the year FY 2020-21. In this case, you have earned just Rs. 40000/Rs 80000 as cash incentives but you are liable to GST provisions since you have crossed the threshold limit of Rs. 40.00 Lakhs, the GST department as well as income tax department will consider your turnover Rs. 40.00 lakhs or more and income tax asked for payment of presumptive tax or audit of your accounts in case you are not paying these taxes. This will land you in trouble for sake of small incentives.
3. Mr C is doing business as a travel agent and he is using his Credit cards for booking Airlines tickets directly from the website of Airlines. He has done a transaction to the tune of Rs. 74.50 lakhs during the FY 2020-21. In Mr C case since he has done booking of hundred persons, but not able to ask for their KYCs and may receive payment through the bank as well as through cash. Now the GST and Income Tax Authorities will consider his turnover of Rs. 74.50 Lakhs as turnover during FY 2020-21 and asked for payment of tax. He is liable to register in GST also because his TO has crossed Rs. 40.00 Lakhs and Income Tax Authorities may ask for presumptive taxation or audit of books of accounts in case of a lower declaration of Income Tax. After this, the department may ask you the source of receipt and payments and this will land you in deep trouble.
The tax authorities are not your relatives and hence they will not show any remorse on you and will levy tax and penalty.
4. Please note that in the above cases you have to prove the sources of income and you have to keep the KYC of payers to produce before the revenue authorities to prove that you are helping your friends and family members and not transacting any business /profession.
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