If You Do These Cash Transactions, You'll Get An Income Tax Notice
High-value cash transactions can still cause the Income Tax Department to raise concerns, even in a world where payments are increasingly being made digitally. Smaller cash transactions might not be a problem, but certain big transactions can draw attention and perhaps result in an income tax notice.
The following five cash transactions might be quite costly for you:
1. Significant bank account cash deposits
The Income Tax Department gets notified when ₹10 lakh or more is deposited in cash into one or more accounts during a fiscal year. If the amount of money exceeds the allowed limit, you can be required to explain.
2. Fixed Deposits (FDs) with large cash deposits
Tax authorities will also be notified if deposits in one or more fixed deposit accounts total more than ₹10 lakh within a fiscal year. They may inquire about the source of the funding.
1. Significant bank account cash deposits
The Income Tax Department gets notified when ₹10 lakh or more is deposited in cash into one or more accounts during a fiscal year. If the amount of money exceeds the allowed limit, you can be required to explain.
2. Fixed Deposits (FDs) with large cash deposits
Tax authorities will also be notified if deposits in one or more fixed deposit accounts total more than ₹10 lakh within a fiscal year. They may inquire about the source of the funding.
3. Expensive Real Estate Deals
When you pay ₹30 lakh or more in cash for a property, the Income Tax Department is automatically notified by the property registrar. This may raise concerns about your funding source.
4. Using Cash to Pay Credit Card Bills
It may draw attention if you pay ₹1 lakh or more in cash for a credit card payment. The IT Department may look into your income and financial sources if you make yearly credit card payments of at least ₹10 lakh (independent of manner).
When you pay ₹30 lakh or more in cash for a property, the Income Tax Department is automatically notified by the property registrar. This may raise concerns about your funding source.
4. Using Cash to Pay Credit Card Bills
It may draw attention if you pay ₹1 lakh or more in cash for a credit card payment. The IT Department may look into your income and financial sources if you make yearly credit card payments of at least ₹10 lakh (independent of manner).
5. Using Cash to Purchase Financial Assets
Money Purchases of shares, mutual funds, debentures, or bonds totaling at least ₹10 lakh are also marked. The Income Tax Department may request proof of the source of the monies.
Money Purchases of shares, mutual funds, debentures, or bonds totaling at least ₹10 lakh are also marked. The Income Tax Department may request proof of the source of the monies.
The Reasons Behind These Regulations
The purpose of these policies is to prevent unreported riches, money laundering, and tax evasion. High-value cash transactions create a record that makes evading legal requirements more difficult.
Using wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW">digital channels for major transactions not only streamlines procedures but also shields you from needless scrutiny. To confidently respond to any questions from the tax authorities, always keep an accurate record of your earnings and outlays.
The purpose of these policies is to prevent unreported riches, money laundering, and tax evasion. High-value cash transactions create a record that makes evading legal requirements more difficult.
Using wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW">digital channels for major transactions not only streamlines procedures but also shields you from needless scrutiny. To confidently respond to any questions from the tax authorities, always keep an accurate record of your earnings and outlays.