16/05/2021
The top 5 cash transactions that can attract income tax notice:
1. Savings/Current account: For an individual, the cash deposit limit in a savings account is ₹1 lakh. If a savings account holder deposits more than ₹1 lakh in one’s savings account, then the income tax department may send income tax notice. Similarly, for current account holders, the limit is ₹50 lakh and on violation of this limit may also be liable for income tax notice.
2. Credit Card bill payment: While paying credit card bill, one should not cross the ₹1 lakh limit. Violation of this cash limit in credit card bill payment doesn’t go well with the Income Tax Department.
3. Bank FD (fixed deposit): Cash deposit in bank FD is allowed but it should not go beyond ₹10 lakh. Violation of this ₹10 lakh limit is also not advisable for a bank depositor making cash deposit in one’s bank FD account.
4. Mutual fund/stock market/bond/debenture: People investing in mutual funds, stocks, bond or debenture must ensure that its cash infusion in the above mentioned investment options doesn’t go beyond ₹10 lakh limit. Failing to maintain this cash infusion limit may lead to the income tax department checking your last Income Tax Return (ITR).
5. Real estate: While buying or selling a property, one must make sure that a cash transaction above ₹30 lakh is questionable as the income tax department discourages cash transactions beyond this limit in a real estate .
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