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.