A notice of income tax will be sent for these 5 cash transactions, and new rules will be in effect

 A notice of income tax will be sent for these 5 cash transactions, and new rules will be in effect

Cash Transaction Rule: These days, the Income Tax Department is highly wary of cash transactions.

The laws governing cash transactions for the general public have been strengthened in recent years by the Income Tax Department and different investment platforms, including banks, mutual fund institutions, broker platforms, etc. Tell us everything there is to know about it.

These financial institutions now only permit cash transactions up to a particular amount. If there is even a little infraction, the Income Tax Department may send a notification.

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 Deposit (FD) in a bank

The maximum cash deposit 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 10 lakh throughout the course of a fiscal year. A bank account's cash deposits and withdrawals that exceed the threshold of 10 lakh rupees in a fiscal year must be reported to the tax authorities. The maximum for current accounts is 50 lakh rupees.

Payment of credit card bills

According to CBDT regulations, payments made in cash instead of credit card bills of Rs 1 lakh or more must be notified to the income tax authority. Additionally, payments made to pay off credit card debt in an accounting year that total at least 10 lakh must be notified to the tax authorities.

Real estate exchanges or transactions

Any purchase or sale of real estate for $30 lakh or more must be disclosed by the property registrar to the tax authorities. Therefore, 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 premise, the tax authorities would gather information about transactions with abnormally high values throughout a specific financial year.