Income tax: Even though now is the era of digital payment, many people still find it easier and better to do cash transactions. However, many people also do cash transactions because they want to stay away from the radar of the Income Tax Department.
Well, there is no problem if you do small shopping with cash, but there are 5 high value cash transactions, which can prove costly for you. You may get a notice (Income Tax Notice) as soon as the Income Tax Department gets wind of it. Let us know about them.
Deposit cash into bank account
According to the rules of the Central Board of Direct Taxes (CBDT), if someone deposits Rs 10 lakh or more in cash in a financial year, then it is reported to the Income Tax Department. This money may have been deposited in one or more accounts. Now because you are depositing more money than the prescribed limit, the Income Tax Department may ask you about the source of this money.
Depositing cash in fixed deposit
Just as questions arise on depositing more than Rs 10 lakh in a bank account in a financial year, the same happens with FD. If you deposit more than Rs 10 lakh in one or more FDs in a financial year, then if there is any doubt, the Income Tax Department may ask you questions about the source of the money.
Big property transaction
If you have made a cash transaction of Rs 30 lakh or more while purchasing a property, then the property registrar will definitely inform the Income Tax Department about this. In such a situation, due to such a big transaction, the Income Tax Department may ask from where you brought the money.
Credit card bill payment
If your credit card bill exceeds Rs 1 lakh or more and you pay it in cash, you may still be asked about the source of the money. At the same time, if you make a payment of Rs 10 lakh or more in any financial year in any way, then the Income Tax Department may question you as to where you got the money from.
Buying shares, mutual funds, debentures or bonds
If a large amount of cash is used to buy shares, mutual funds, debentures or bonds, this also alerts the Income Tax Department. If a person makes a transaction of Rs 10 lakh or more, then its information reaches the Income Tax Department. In such a situation, the Income Tax Department may ask you from where you brought the cash.