Top 5 CASH transactions that can attract income tax notice
Abut By Author
CA.Jayprakash Pandey
One needs to remain alert while doing any kind of high value cash transaction because the Income Tax Department has become highly vigilant about the cash transactions.
The Income Tax Department and various investment platforms like bank, mutual fund houses, broker platforms, etc. have been discouraging cash transaction by tightening their rules for public in general in last few years.
The Income Tax Department may send notice to the violator now as days in case of slight violation as these institutions allow cash transaction to a certain limit.
Here are top 5 cash transactions that can attract income tax notice: –
1) Bank FD (fixed deposit): Cash deposit in bank FD is allowed but it should not go beyond Rs 10 lakh. Violation of this Rs 10 lakh limit is also not advisable for a bank depositor making cash deposit in one’s bank FD account.
2) Real estate: One must make sure that cash transaction above Rs 30 lakh is questionable while buying or selling a property as income tax department discourages cash transaction beyond this limit in a real estate deal.
3) Savings/Current account: The cash deposit limit in savings account for an individual is Rs 1 lakh. The income tax department may send income tax notice if a savings account holder deposits more than Rs 1 lakh in one’s savings account. Similarly, for current account holders, the limit is Rs 50 lakh and on violation of this limit may also liable for income tax notice.
4) Mutual fund/stock market/bond/debenture: People investing in mutual funds, stocks, bond or debenture must ensure that its cash infusion in the above mentioned investment options doesn’t go beyond Rs 10 lakh limit. Failing to maintain this cash infusion limit may lead to income tax department checking your last Income Tax Return (ITR).
5) Credit Card bill payment: One should not cross Rs 1 lakh limit while paying credit card bill. Violation of this cash limit in credit card bill payment doesn’t go well with the Income Tax Department.
Sources: – https://www.moneycontrol.com/news/business/personal-finance/here-are-5-cash-transactions-that-can-attract-income-tax-notice-6873121.html
https://www.livemint.com/money/personal-finance/income-tax-5-cash-transactions-that-can-attract-i-t-notice-11620364719333.html
Summary
| SL.No | Transactions | Cash Limit ( Rs. in Lakh) |
| 1 | Bank FD | 10 |
| 2 | Real estate | 30 |
| 3 | Savings/Current account | 1/50 |
| 4 | Mutual fund/stock market/bond/debenture | 10 |
| 5 | Credit Card bill payment | 1 |
Disclaimer:
The purpose of this is to share knowledge and it is for education purpose only. This does NOT constitute NOR does this form part of neither it is to be construed as, A LEGAL OPINION. The analysis is solely based on the reading abilities of the Author. They may be correct/incorrect as per you. No representation or warranty, express or implied, is made or given in respect of any information provided. UNDER NO circumstances should any recipient rely on this communication as a basis for any legal decision. The views expressed are of personal to the author. They do not reflect the views of any organization he may be directly/indirectly associated with. Neither author nor any of its affiliates accepts any legal liability, or responsibility, for, or provides any assurance or guarantee of accuracy, authenticity, completeness, correctness, dependability, reliability, suitability or timeliness of, any part of this article. The contents of this article are based only on the understanding of the Law, Rules, Notifications, etc. of the author and THEY ARE NOT BASIS FOR ANY LEGAL OPINION.
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