Information on Cash Transactions: Major News! These 5 cash transactions will receive income tax notices, and a new rule has been adopted.
The Income Tax Agency has recently implemented a new cash transaction rule that has made them extremely cautious.
The laws governing cash transactions for the general public have been tightened over time by the Income Tax Department and different investment platforms, including banks, mutual fund institutions, broker platforms, etc. Let's learn all the pertinent information.
Many financial institutions now only permit cash transactions up to a particular amount. Even the smallest infraction can result in a notice from the Income Tax Department.
These trades are widespread and are under income tax surveillance. Banks, mutual funds, brokerage firms, and property registrars must notify the Income Tax Department if you do significant cash transactions with them. Tell us about 5 transactions like these that could get you into trouble.
Fixed Deposits in a Bank (FD)
The greatest money store into a bank FD is Rs 10 lakh. Banks will be required to notify whether individual deposits in one or more fixed deposits exceed the established limit, according to a statement from the Central Board of Direct Taxes (CBDT).
deposit to a bank savings account
A bank account can only accept deposits of cash up to 10 lakh. The Income Tax Department has the authority to deliver an Income Tax notice to a savings account customer who deposits more than Rs 10 lakh over the course of a fiscal year. A bank account's cash deposits and withdrawals that exceed Rs 10 lakh in a fiscal year must be reported to the tax authorities. The maximum for current accounts is 50 lakh rupees.
paying a credit card bill
Cash payments of Rs 1 lakh or higher against credit card bills are required to be reported to the Income Revenue Department under CBDT regulations. Also, if a payment of at least 10 lakh is made to pay off credit card debt in a fiscal year, the payment must be notified to the tax department.
purchase or sale of real estate
Any purchase or sale of real estate of Rs 30 lakh or more must be reported to the tax authorities by the property registrar. Thus, taxpayers are urged to declare their cash transactions in Form 26AS when buying or selling any real estate property because the Registrar of Property will undoubtedly do so.
investment in bonds, debentures, mutual funds, and shares
Investors should make sure that their cash transactions in these investments do not exceed 10 lakh in a financial year while investing in mutual funds, equities, bonds, or debentures.
To track taxpayers' high-value cash transactions, the Income Tax Department has created the Annual Information Return (AIR) statement of financial transactions. On this basis, the tax authorities will gather information about transactions with particularly high values throughout a specific financial year.
