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Here are 5 cash transactions that can attract income tax notice
May, 10th 2021

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

-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.

-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.

-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.

-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).

-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.

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