Income Tax Notice: Despite the increased emphasis on digital, there are still many people who consider it easy and convenient to do transactions in cash. But large cash transactions can bring you on the radar of the Income Tax Department. There are many such transactions, which the Income Tax Department keeps an eye on and can answer questions from you. Banks, mutual funds, brokerage houses, and property registrars have to inform the Income Tax Department if you do cash transactions in excess of the prescribed limit.
Let us know about 6 such transactions, which can put you in trouble and can issue Income Tax Notice-
Cash deposit in FD
If you deposit a large amount of money in FD through cash, then the bank has to inform the Income Tax Department about it. The Central Board of Direct Taxes (CBDT) has asked banks that if an individual holds one or more fixed deposits (other than fixed deposits made by way of renewal of a fixed deposit) in a financial year of Rs. Banks will have to inform the CBDT about the amount deposited in cash.
Cash deposit in the bank account
CBDT has made this rule that if you deposit cash of Rs 10 lakh or more in a financial year in one or more accounts of any bank or any co-operative bank, then the bank or co-operative bank will notify it. to the Income Tax Department. This rule is exactly the same as FD. Current account and time deposits are excluded from this. If you deposit more than this fixed limit, the income tax department can question the source of the money.
Credit card bill payment
Sometimes people also deposit the credit card bill in cash. If you pay the credit card bill in cash of Rs 1 lakh or more in one go, then the income tax department will be informed. On the other hand, if you pay any credit card bill of Rs 10 lakh or more in a financial year by any means (cash/cheque/transfer), the report will go to the Income Tax Department and you will be asked about the source of the money.
If a person buys or sells the immovable property for an amount of Rs 30 lakh or more, then the property registrar has to inform the tax authorities. In such a situation, the Income Tax Department may ask you from where the money came to you for such a large transaction.
Purchase of shares, mutual funds, debentures and bonds
If you do large amounts of cash transactions in shares, mutual funds, debentures, and bonds, then you may face problems. In a financial year, if a person purchases shares, mutual funds, debentures, and bonds for a number of Rs 10 lakh or more, then companies or institutions have to inform the Income Tax Department.
Purchase of foreign currency
The income tax department also keeps an eye on the transactions that take place in the purchase of foreign exchange. If a person purchases foreign currency worth Rs 10 lakh, then its information goes to the Income Tax Department. Foreign currency includes traveler’s checks and foreign currency cards, debit or credit cards. Therefore, there is a need to be careful in the purchase of foreign currency as well.