The Income Tax Department of India has intensified its campaign against tax evasion and manipulation. The government is keeping a close watch on both cash transactions and online transactions.
Any carelessness or mistake in financial dealings can prompt immediate notices from the tax authorities. Individuals are advised to be cautious and avoid the following five types of transactions:
Depositing Cash in Bank Accounts
- As per Central Board of Direct Taxes (CBDT) regulations, if an individual deposits cash exceeding ₹10 lakh in a financial year in their bank account, the Income Tax Department is automatically notified. This also applies if the cash is deposited across multiple accounts but linked to the same PAN and Aadhaar numbers. The department may inquire about the source of these funds.
Depositing Cash in Fixed Deposits
- Depositing cash over ₹10 lakh in a financial year in fixed deposits can also attract the attention of the Income Tax Department. They may send a notice inquiring about the income source or the origin of the funds. Failure to provide accurate information can lead to legal action.
Investing in Shares, Mutual Funds, Debentures, or Bonds
- Many individuals consider investing in shares, mutual funds, debentures, or bonds a good option. However, if these investments involve large cash transactions exceeding ₹10 lakh in a financial year, this information is reported to the Income Tax Department.
Credit Card Bill Payments
- With credit card usage becoming commonplace, users sometimes accumulate bills amounting to lakhs of rupees. If your monthly credit card bill exceeds ₹1 lakh and you wish to pay it in cash, the Income Tax Department may inquire about the source of the cash. Similarly, if you make online or offline payments totaling more than ₹10 lakh in a financial year, the department may question the source of these funds.
Property-Related Transactions
- In urban and Tier-2 cities, where real estate prices are high, large cash transactions are common. However, if you are involved in property transactions involving cash payments of ₹30 lakh or more, be cautious. Property registrars notify the Income Tax Department of such transactions, who may then inquire about the source of the funds.
The Income Tax Department’s increased scrutiny aims to clamp down on tax evasion and ensure transparency in financial transactions. Individuals should exercise caution and adhere to legal guidelines to avoid unwanted scrutiny or legal complications.
Something went wrong. Please refresh the page and/or try again.
