Income Tax News: Although the majority of people now use digital payment methods, many still think that cash transactions are convenient and beneficial. In addition, a lot of people use cash transactions in order to avoid being detected by the Income Tax Department. Even though you may believe that using cash transactions will save you money on taxes, Income Tax closely monitors your five cash transactions. As soon as the Income Tax Department learns about it, you can receive an Income Tax Notice.
Rs 10 Lakh Trigger for Income Tax Department Notification
The Income Tax Department is notified whenever an individual deposits Rs 10 lakh or more in cash during a financial year, as per the guidelines set forth by the Central Board of Direct Taxes (CBDT). One or more accounts may have received this money. The Income Tax Department may question you about the source of this money if you are depositing more than the allowed amount.
Concerns Between Cash Deposits and Fixed Deposits
Concerns regarding FDs and deposits exceeding Rs 10 lakh into a bank account within a fiscal year are similar. The Income Tax Department may ask you where the money came from if you deposit more than Rs 10 lakh in one or more FDs throughout the course of a financial year.
Cash Transactions over Rs 30 Lakh
The property registrar would surely inform the Income Tax Department if you paid cash for a house purchase that cost at least Rs 30 lakh. Given the size of this transaction, the Income Tax Department may want to know where you obtained the funds.
Bills Exceeding Rs 1 Lakh
You can still be questioned about the source of the money if your credit card bill is more than Rs 1 lakh or more and you pay it with cash. At the same time, the Income Tax Department may question you about where you obtained the money if you make any kind of payment totaling Rs 10 lakh or more in any given financial year.
Funds Under Scrutiny
The Income Tax Department is also notified when a sizable sum of money is utilised to purchase bonds, mutual funds, shares, or debentures. Information about a transaction above Rs 10 lakh is forwarded to the Income Tax Department. The Income Tax Department could question you about where you got the money in such a case.
Keep watching our YouTube Channel ‘DNP INDIA’. Also, please subscribe and follow us on FACEBOOK, INSTAGRAM, and TWITTER