Income Tax: Income Tax monitors these five of your transactions and then notifies you

Income Tax: Income Tax monitors these five of your transactions and then notifies you

Income Tax: Income Tax monitors these five of your transactions and then notifies you

Income Tax: This information is for you if you also do cash transactions. Let us really inform you that the Income Tax Department is monitoring these five of your cash transactions and will thereafter give you a notification.

Even in this day of digital payments, many individuals still believe that cash transactions are preferable and simpler. To avoid being detected by the Income Tax Department, a lot of individuals also conduct cash transactions.

There is nothing wrong with using cash for small-scale purchases, but there are five high-value cash transactions that might end up costing you money. You could get a notification (Income Tax Note) from the Income Tax Department as soon as they learn about this. Tell us about them, please.

1. Making a bank account cash deposit

The Income Tax Department receives a report from A if they deposit cash and earn Rs 10 lakh or more within a financial year, as per the guidelines set out by the Central Board of Direct Taxes (CBDT). One or more accounts had to have received this money. The Income Tax Department may question you about the source of this money if you are depositing more than the allowed amount.

2. Putting money into a fixed deposit

Similar concerns are raised about FDs as they are about depositing more than Rs 10 lakh in a bank account within a fiscal year. If, during a financial year, you deposit more than Rs 10 lakh in one or more FDs, the Income Tax Department may, if there is any doubt, quiz you on the source of the funds.

3. Large-scale real estate deals

In the event that you paid cash for a home purchase totaling at least Rs 30 lakh, the property registrar would undoubtedly notify the Income Tax Department. Because this was such a large transaction, the Income Tax Department could inquire as to where you got the money.

4. Making a credit card payment

Even if you pay your credit card payment in cash and it is Rs 1 lakh or more, you could still be questioned about where the money came from. In addition, the Income Tax Department may interrogate you about the source of any payment you make in any form totaling more than Rs 10 lakh within a given fiscal year.

5. Purchasing bonds, debentures, mutual funds, or shares

The Income Tax Department is also notified when substantial sums of cash are used to purchase bonds, mutual funds, shares, or debentures. Information about a transaction above Rs 10 lakh is sent to the Income Tax Department. The Income Tax Department could question you about where you got the money in such a case.