New Delhi: The Income Tax Department has become very strict these days. You are a little careless and an Income Tax Notice reaches you. Not only this, if you frequently make transactions of lakhs of rupees in the bank and do not pay adequate Income Tax, then also a notice is certain. In some cases, scrutiny also takes place. Today we are telling you that if you make a cash transaction (deposit or withdraw money in cash) of Rs 50 thousand or more in your bank account, then also you are inviting an Income Tax Notice.
When will you get an income tax notice?
CA C. Kamlesh Kumar, taxation partner of income tax consulting firm Ravi Rajan & Co LLP, Delhi, says that one should be careful while doing bank transactions in cash. If you deposit or withdraw cash of Rs 50,000 or more in your bank account at one time, then the bank can inform the Income Tax Department about you. Actually, under the Income Tax Act, the bank gives information about such customers through Annual Information Report (AIR) or Statement of Financial Transactions (SFT). If you do not have a clear source of this transaction, then you can also get a notice from the Income Tax Department.
Is there any limit on the amount of money in bank transactions?
Kamlesh Kumar says that you can deposit as much money as you want in your bank account. But caution should be exercised while depositing a large amount. This is because, as per the rules of the Income Tax Act, banks have to give information about transactions of large amounts to the Income Tax Department. On the basis of this information, the Income Tax Department plans further action.
When does the Income Tax Department become active
CA Kamlesh Kumar says that if you deposit Rs 10 lakh or more in your savings account during a financial year, your bank will inform the Income Tax Department about it. Similarly, if you deposit Rs 50,000 or more in cash at one time, you may have to give information about it too.
Avoid making large transactions continuously
He says that if you keep making large transactions in your bank account continuously throughout the year, then the bank may consider them suspicious. The bank can give information about such transactions to the Income Tax Department. Banks use automated systems to share such information. Information about such transactions can also be given to the Financial Intelligence Unit (FIU) or tax officials. For example, suppose a person deposits Rs 1 lakh several times in a month and does not have any clear business or salary proof, then his account can be investigated. Apart from this, there can be many other things.
If you make big transactions in the bank, keep complete documents of the source of funds with you. If the bank or the Income Tax Department officer asks where the money came from, be ready to tell them. Not only this, if the money came to you from a third party, keep proof of that ready as well. Such as a copy of the PAN card of the person giving the money, any agreement, property document, gift deed etc.
The bank keeps complete surveillance
If you think that the bank is only concerned with keeping track of deposits and withdrawals of money, then you are mistaken. The bank constantly keeps an eye on the transactions taking place in the accounts of its customers. The bank has such systems in place that keep an eye on the unusual transaction pattern of an account, transactions of large cash amounts and transfers from multiple accounts. If needed, they can ask for clarification or supporting documents. If you do not cooperate with the bank officials, they can send Suspicious Transaction Report (STR) to the appropriate regulatory authorities.
