Income Tax News: Even in this day of digital payments, a lot of people still think that using cash makes transactions simpler and more effective. To avoid being detected by the Income Tax Department, a lot of people also conduct cash transactions. If you do small-scale cash shopping, it shouldn’t be a problem, but there are five high-value cash transactions that could end up costing you money. As soon as the Income Tax Department learns about it, you might receive an Income Tax Notice. Let us tell you about it.
Cash Deposit Threshold
The Income Tax Department is notified if 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 since you are depositing more than the allowed amount.
Exceeding Rs 10 Lakh in a Fiscal Year
Similar concerns are raised about FDs as they are about depositing more than Rs 10 lakh into a bank account during a fiscal year. If, during a financial year, you deposit more than Rs 10 lakh in one or more FDs, the Income Tax Department may inquire as to where the money came from.
Rs 30 Lakh Cash Transaction
In the event that you paid cash for a property purchase totaling at least Rs 30 lakh, the property registrar will undoubtedly notify the Income Tax Department of this. Because this was such a large transaction, the Income Tax Department might inquire as to where you got the money.
Settling Bills in Cash Beyond Rs 1 Lakh
You might 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.
Income Tax Department Notified on Sizable Transactions
The Income Tax Department is also notified when a sizable sum of money is used to purchase bonds, mutual funds, shares, or debentures. Information about a transaction exceeding Rs 10 lakh is forwarded to the Income Tax Department. The Income Tax Department might question you about where you got the money in such a case.
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