Income tax: 5 cash transactions that can attract I-T notice

Top 5 cash transactions that can attract income tax notice Balwant Jain listed out the following:

1] Savings/Current account: For an individual, the cash deposit limit in savings account is ₹1 lakh. If a savings account holder deposits more than ₹1 lakh in one’s savings account, then the income tax department may send income tax notice. Similarly, for current account holders, the limit is ₹50 lakh and on violation of this limit may also liable for income tax notice.

2] Credit Card bill payment: While paying credit card bill, one should not cross ₹1 lakh limit. Violation of this cash limit in credit card bill payment doesn’t go well with the Income Tax Department.

3] Bank FD (fixed deposit): Cash deposit in bank FD is allowed but it should not go beyond ₹10 lakh. Violation of this ₹10 lakh limit is also not advisable for a bank depositor making cash deposit in one’s bank FD account.

4] 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 ₹10 lakh limit. Failing to maintain this cash infusion limit may lead to income tax department checking your last Income Tax Return (ITR).

5] Real estate: While buying or selling a property, one must make sure that cash transaction above ₹30 lakh is questionable as income tax department discourages cash transaction beyond this limit in a real estate deal.

5 thoughts on “Income tax: 5 cash transactions that can attract I-T notice”

  1. Don’t think cash transaction in real estate upto Rs 30 lakhs is allowed as cash transaction for any purpose is limited to Rs.2 lakhs. Real estate transaction above Rs 30 lakhs gets reported to Income tax department by the registering authority.

  2. In saving account Cash upto Rs.10.00 (Ten) Lakh can be deposited during one financial year and in current account it is upto Rs.50.00 (Fifty) Lakhs only during one financial year. Be noted.
    Moreover, you can pay to any one Rs.2 (Two) Lakh in Cash.
    One thing more, if you pay more than Rs.10000/- in Cash, depreciation on that shall not be allowed. Be careful.

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