If you deal mostly in cash, beware! The Income Tax Department may be keeping a close watch on you. They are issuing special notices to those dealing in cash transactions, scrutinizing every move where significant cash is involved. It’s important to stay informed about the latest rules and regulations in this regard.
Here are some transactions which could invite a notice from Income Tax Department:
Cash Transactions Over ₹10 Lakhs
Cash transactions in shares, mutual funds, debentures, or bonds are limited to ₹10 lakhs per financial year. If you invest more, avoid using cash. Non-compliance may lead to notices from the department.
FD Investments Over ₹10 Lakhs
Deposits of ₹10 lakhs or more in a financial year into FDs may prompt the income tax department to inquire about the source of funds. Consider depositing such amounts online or via cheque where possible.
Cash Deposits in Bank Accounts
Depositing ₹10 lakhs or more in a single or multiple accounts during a financial year in cash could lead to scrutiny by the income tax department. The maximum limit for current accounts is ₹50 lakhs.
Also read: How to Easily File Your 2024 Income Tax Returns with Multiple Income Sources
Paying Credit Card Bills in Cash
Depositing over ₹1 lakh in cash towards credit card bills in one go or more than ₹10 lakhs in a financial year could prompt inquiries from the income tax department about the source of funds.
Cash Transactions in Property Deals
Registering property transactions over ₹30 lakhs in cash with the property registrar automatically reports the transaction to the income tax department.
These rules are designed to monitor and regulate cash transactions more closely.