Nothing like that untill your Bank reveals such transaction details IT ppl also there is a Limit for every person to pay the tax if you exceed that income limit you need to pay tax.But no one 'll look after the small online money transfers
I am in a similar situation as I get most of my income through Paypal. Officially I should declare my it on my taxes every year however I don't. Paypal does not give the information to the local authorities however your local bank might.
I don't thnk that banks give that information short of a supeona. I doubt they have the time or the manpower to monitor every single persons transactions looking for pay pal additions, and even then they have no way to know what the nature of the transaction was
They might now know what the nature of the transaction was but it can be classified as income. There are so many transactions out there that it would indeed be nearly impossible to track every single one of them.
All declared income is subject to tax but if you don't declare your income then there is no need to pay any tax. Obviously if you get caught then you can be in a lot of trouble. I am not sure how your bank would help you with tax explanation??
As already explained well here, all income is subject to TAX, I don't know how the banks in India handles incomming transfers, anyway, if the TAX authorities make a investigation on you they will ask question to every single transaction on your bank account.
If you have a high volume / huge amount of money you should consider to make a legal offshore setup where it is possible to avoid any troubles with the tax authorities. This also applies for all other countries for instant in Europe.
Yes, the funds you receive from Paypal are also treated as your income. So these earnings are also liable for income tax. However you have to disclose this income in your tax statement. If the amount is more, you might have to worry about that.