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

Income tax: 5 cash transactions that can attract INCOME TAX notice

This is in reference to the update regarding Income tax: 5 cash transactions that can attract I-T notice. The same is for your information purpose.

One needs to remain alert while doing any kind of high value cash transaction because the Income Tax Department has become highly vigilant about the cash transactions. If a person invests in the stock market via demand draft using cash, the broker will report about the investment in its balance sheet.

The top 5 cash transactions that can attract income tax notice:

1.      Savings/Current account: For an individual, the cash deposit limit in a 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 be liable for income tax notice.

2.      Credit Card bill payment: While paying credit card bill, one should not cross the ₹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 the income tax department checking your last Income Tax Return (ITR).

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

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

  1. Thulaseedharan K

    The only way to fight against black money, money hoarding, mafia and criminal activities, counterfeit currency, corruption etc is to bring all transactions digital. No physical money for transactions.

    1. Only death penalty for black money holders can curb black money. The political Corruption has devasted this country resulted in poverty & backwardness all over the country.

  2. Why ? There should be a limit on the income tax on the agricultural income to protect small farmers today what is happening that big farmers enjoy the tax rebate where as there income of agriculture is in crores . Most big industrialist scoops billions of rupees by showing there income as agricultural income from barren cheap land where no irrigation can take place but it is shown as agriculture income .

    1. Currency notes issued should have fixed life. Each note of higher denomination ie Rs 2000, Rs 500 Rs 200 & all such currency notes should expire its use in cash transactions. The life span to be printed as expiry date in a prominent manner. After the expiry date such currency can be deposited only in the Indian bank account within say 6 months only. This procedure will bring full control over stacking of currency notes in the house,in Bank lockers and such other places. Thus resulting in:-

      Clean currency. No soiled notes
      Reduced cash transactions.
      Control over huge cash withdrawal.
      Government can easily change design etc
      Bring control over black marketing.
      There are enumrable advantages of such arrangement.
      Government should take this matter seriously and fine tune implementation.

  3. When I am poor no official cares if ate any are not but when I work hard and earn money they are behind me? Blood Suckers! Injustice….

Comments are closed.