Do not have to run around in the pursuit of saving income tax. Therefore, it is important to keep in mind the income tax rules. Do not make any such transaction which the income tax department notices.
Tax evaders are constantly on the radar of the income tax department. The purchases and banking transactions of such people are closely monitored. Let us know which are the 6 big transactions, which if you do in a financial year, you may get an income tax notice.
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1- Deposit cash in bank account
According to the rules of the Central Board of Direct Taxes (CBDT), if a person deposits Rs 10 lakh or more in cash in a financial year, then it has to be reported to the Income Tax Department. This money may have been deposited in one or more accounts of the same account holder. Since someone is depositing more money than the prescribed limit, the Income Tax Department may ask you for information about the source of the money.
Also Read: Bank Account Deposit Rules- How much money can you keep in a savings account limits interest and tax rules explained
2- Depositing cash in fixed deposit
Just like a bank can inquire about cash deposits of Rs 10 lakh in a bank account in a financial year, it applies the same rule to transactions in FDs. If someone deposits more than Rs 10 lakh in FDs in a financial year, the income tax department can ask them about the source of the money.
3- Buying shares, mutual funds, debentures or bonds
Many people consider investing in shares, mutual funds, debentures or bonds a good option. Such investments can also develop the habit of saving money in the investor, but if someone uses a large amount of cash to buy shares, mutual funds, debentures or bonds, it also alerts the Income Tax Department.
If a person makes a transaction of Rs 10 lakh or more in any such investment option, then its information reaches the Income Tax Department, which can ask you about the source of the money.
4- Payment of credit card bill
Nowadays, the use of credit card has become a common thing in today’s time. Many times the bill of the users goes into lakhs of rupees, but if your monthly credit card bill is more than 1 lakh rupees and you want to pay it in cash, then also the Income Tax Department can ask you about the source of your money. At the same time, if you pay Rs 10 lakh or more in a financial year through any medium online or offline, then the Income Tax Department can question you that where did you get this money from?
5- Property related transactions
Real estate prices in cities and tier-2 towns are exorbitant, and transactions involving large amounts are common, but beware of the Income Tax Department if you are making a cash transaction of Rs 30 lakh or more while buying a property. The property registrar will inform the Income Tax Department, which in turn may ask you about the source of the money.
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