The Income Tax Department has become more careful and cautious about various cash transactions nowadays. Last few years, the Income Tax Department has strengthened various regulations and guidelines for cash transactions for the public. Cash transactions are monitored through various investment platforms like banks, mutual fund houses, broker platforms, etc.
There are many such cash transactions that are monitored and reviewed by the income tax authorities whenever a person does huge cash transactions with banks, mutual funds, brokerage houses, and property registrars. Below we have mentioned the various cash transactions that can invite Income Tax Department to your houses or offices.
Cash Transactions That Can Bringe Income Tax Notices
1. Purchase Of Shares, Mutual Funds, Debentures, And Bonds
If you make major cash transactions in stocks, mutual funds, debentures, and bonds, you might invite the Income Tax Department authorities to yourself. The cash transactions in stocks, mutual funds, debentures, and bonds are restricted to a maximum of Rs 10 lakh every fiscal year. So, if you want to invest in any of them, the first thing you should know is that you don’t have to use a large sum of money.
2. Payment Of Credit Card Bill
Most of the people frequently deposit their credit card bills in cash. If you deposit more than Rs 1 lakh in cash as a credit card bill in a single transaction, the Income Tax Department may examine you. If you pay a credit card bill in cash for more than Rs 10 lakh in a fiscal year, you may be asked about the source of the funds.
3. Property Transaction
If you make a large cash transaction with the property registrar, the information is sent to the Income Tax Department as well. If you buy or sell a property for Rs 30 lakh or more in cash, the property registrar will instantly notify the transaction to the Income Tax Department.
4. Bank Fixed Deposit
If you make a fixed deposit of Rs 10 lakh or more once or more in a year, the Income Tax Department may interrogate you about the source of the cash. A piece of quick advice is to put the majority of the money in an FD either online or by check in this circumstance.
5. Bank Savings Account Deposits
The Income Tax Department may query you about the source of funds if you deposit Rs 10 lakh or more in cash in one or more accounts within a fiscal year. The maximum current account balance is Rs 50 lakh.