There is a set limit for each bank transaction. If this limit is exceeded, the client may get a direct notification from the Income Tax Department asking for clarification. Many individuals still prefer using cash for transactions, even in the wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital age of India. Large cash transactions cause issues, whereas little transactions are OK. The Income Tax Department may not notice you if you make a small mistake.
The following five significant transactions might result in an Income Tax notice requesting clarification:
1. Depositing money into a bank account:
In accordance with the Central Board of Direct Taxes (CBDT) regulations, the Income Tax Department is notified whenever an individual deposits ₹10 lakh or more in cash within a fiscal year. One or more accounts may receive this sum of money. The department may request an explanation of the money' source if the submitted amount is greater than the allowed amount.
2. Fixed Deposit Cash Deposit:
putting ₹10 lakh or more in one or more fixed deposits within a fiscal year may also lead the department to probe the source of the money, just like putting more than ₹10 lakh in a bank account does.
3. Major Real Estate Deals:
The property registrar will notify the Income Tax Department if a property acquisition involves cash transactions totaling at least ₹30 lakh. In these situations, the department could ask where such a substantial amount came from.
4. Paying Credit Card Bills:
If you pay your credit card bill in cash and it exceeds ₹1 lakh, the department could question where the money came from. Similarly, the government could check the source if you pay ₹10 lakh or more in a fiscal year.
5. Investing in bonds, mutual funds, or shares:
The Income Tax Department is notified whenever an individual spends ₹10 lakh or more on bonds, mutual funds, or shares. After that, the department could ask where the money for these transactions came from.
The following five significant transactions might result in an Income Tax notice requesting clarification:
1. Depositing money into a bank account:
In accordance with the Central Board of Direct Taxes (CBDT) regulations, the Income Tax Department is notified whenever an individual deposits ₹10 lakh or more in cash within a fiscal year. One or more accounts may receive this sum of money. The department may request an explanation of the money' source if the submitted amount is greater than the allowed amount.
2. Fixed Deposit Cash Deposit:
putting ₹10 lakh or more in one or more fixed deposits within a fiscal year may also lead the department to probe the source of the money, just like putting more than ₹10 lakh in a bank account does.
3. Major Real Estate Deals:
The property registrar will notify the Income Tax Department if a property acquisition involves cash transactions totaling at least ₹30 lakh. In these situations, the department could ask where such a substantial amount came from.
4. Paying Credit Card Bills:
If you pay your credit card bill in cash and it exceeds ₹1 lakh, the department could question where the money came from. Similarly, the government could check the source if you pay ₹10 lakh or more in a fiscal year.
5. Investing in bonds, mutual funds, or shares:
The Income Tax Department is notified whenever an individual spends ₹10 lakh or more on bonds, mutual funds, or shares. After that, the department could ask where the money for these transactions came from.
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