Filing your income tax return is essential for any year in which you engage in financial transactions related to property. To avoid receiving income tax notices, there are five key points that you should keep in mind:

1. Filing of your Income Tax Return

It is necessary to file an income tax return for the year in which you engage in financial transactions related to property. This includes buying or selling a property, receiving a gift of property, or taking a loan to purchase a property. Even if your income falls below the taxable limit, you are still required to file an income tax return if you engage in these kind of transactions. Failing to file an income tax return can result in penalties and legal consequences, including receiving income tax notices.

2. If you have purchased a property using your own funds, you should ensure that your income source  sufficient to justify the purchase as per your income declared in your income tax return. This will help avoid any potential queries from the tax authorities.

3. If you have sold a property, you must include any capital gain made on the sale in your income tax return. This is important, as failure to do so may lead to income tax notices and penalties.

4. If you have acquired a property as a gift from a relative, it is important to show the gift amount under exempt income in your income tax return. This will help avoid any queries from the tax authorities.

5. If you have taken a loan from a relative to purchase a property, ensure that you have receipts for the loan transaction through a bank, and that the receipts are signed by the relative. It is also important to ensure that the relative’s income tax returns are regularly filed. This will help avoid any potential tax queries or penalties. In conclusion, engaging in financial transactions related to property requires careful consideration and adherence to income tax regulations. By keeping in mind the five points mentioned above, you can avoid income tax notices and penalties that may arise due to non-compliance. Remember to file your income tax return on time, accurately report your income sources and financial transactions related to property, and ensure that you have receipts and other necessary documentation to support your claims. By doing so, you can ensure that your income tax affairs remain in order and avoid any unpleasant legal consequences.