Have you heard about the Annual Information Return to be filed with your Income-Tax returns under Section 285 BA, effective from April 1, 2005?

Well, the Central Board of Direct Taxes had issued a circular in December 2004, wherein it stated some transactions would entail the filing of a separate return -- Form 65.

Such financial transactions include: cash deposits aggregating Rs 10 lakh or more in a year in any savings account. Payment made by any person against credit card bills aggregating to Rs 200,000 or more in a year. Investment of Rs 200,000 or more in a mutual fund.

Investment of Rs 500,000 or more in bonds or debentures issued by a company or an institution. Receipt for Rs 100,000 or more for acquiring shares issued by a company.

Purchase or sale of any immovable property valued at Rs 30 lakh (Rs 3 million) or more, and investment of Rs 500,000 or more in a year in bonds issued by the Reserve Bank of India [Get Quote].

Thankfully, the onus of reporting the transactions is not on the assessee, but the agency or corporate providing the service.

Banks, mutual funds, companies issuing shares, post offices, RBI, and registrars will have to file the returns in a CD-Rom format to the National Securities Depositiory Services, which has been identified as the hub for processing the data.

A tax consultant said though the individual tax payer need not fill the AIR form, it would be prudent on his part to keep a note of the above mentioned transactions so to avoid any discrepancies while filing his annual returns.

This AIR will be linked to the centralised processing system of the income tax, which will be the database of all assessess with a valid permanent account number.

AIR will help widen the tax net, which has become increasingly important as tax collection targets are increasing year after year.