Cash Transaction cases that likely generate income tax notice
Income Tax Notice is likely to come to you on these 5 Cash Transactions. So avoid them.
1. Bank Fixed Deposit:
Cash deposit in bank FD should not exceed Rs 10 lakh. The Central Board of Direct Taxes (CBDT) has announced that banks will have to disclose whether individual deposits in one or more fixed deposits exceed the prescribed limit.
2. Savings Account Deposit :
The limit for cash deposit in a bank account is Rs 10 lakh. If a savings account holder deposits more than Rs 10 lakh during a financial year, the Income Tax Department can send an Income Tax notice. Meanwhile, cash deposits and withdrawals in a bank account that cross the limit of Rs 10 lakh in a financial year should be disclosed to the tax authorities. In current accounts, the cap is Rs 50 lakh.
3. Credit Card Bill Payment :
As per CBDT rules, cash payments of Rs 1 lakh or more against credit card bills should be reported to the Income Tax Department. Additionally, if 10 lakh or more is paid in a financial year to settle credit card bills, the payment should be disclosed to the Income Tax Department.
4. Sale or Purchase of Property
The property registrar will have to inform the tax authorities about any investment or sale of immovable property worth Rs 30 lakh or more. Therefore, in the purchase or sale of any real estate property, taxpayers are advised to report their cash transactions in Form 26AS as the Registrar of Property will definitely report the same.
5. Investment in Shares, Mutual Funds, Debentures and Bonds
Investors investing in mutual funds, stocks, bonds or debentures should ensure that their cash transactions in these investments do not exceed Rs 10 lakh in a financial year.
Income Tax Department has prepared the Annual Information Return (AIR) Statement of Financial Transactions to trace high-value cash transactions of taxpayers. On this basis, the tax authorities would collect details of transactions of abnormally high value in a particular financial year. more
1. Bank Fixed Deposit:
Cash deposit in bank FD should not exceed Rs 10 lakh. The Central Board of Direct Taxes (CBDT) has announced that banks will have to disclose whether individual deposits in one or more fixed deposits exceed the prescribed limit.
2. Savings Account Deposit :
The limit for cash deposit in a bank account is Rs 10 lakh. If a savings account holder deposits more than Rs 10 lakh during a financial year, the Income Tax Department can send an Income Tax notice. Meanwhile, cash deposits and withdrawals in a bank account that cross the limit of Rs 10 lakh in a financial year should be disclosed to the tax authorities. In current accounts, the cap is Rs 50 lakh.
3. Credit Card Bill Payment :
As per CBDT rules, cash payments of Rs 1 lakh or more against credit card bills should be reported to the Income Tax Department. Additionally, if 10 lakh or more is paid in a financial year to settle credit card bills, the payment should be disclosed to the Income Tax Department.
4. Sale or Purchase of Property
The property registrar will have to inform the tax authorities about any investment or sale of immovable property worth Rs 30 lakh or more. Therefore, in the purchase or sale of any real estate property, taxpayers are advised to report their cash transactions in Form 26AS as the Registrar of Property will definitely report the same.
5. Investment in Shares, Mutual Funds, Debentures and Bonds
Investors investing in mutual funds, stocks, bonds or debentures should ensure that their cash transactions in these investments do not exceed Rs 10 lakh in a financial year.
Income Tax Department has prepared the Annual Information Return (AIR) Statement of Financial Transactions to trace high-value cash transactions of taxpayers. On this basis, the tax authorities would collect details of transactions of abnormally high value in a particular financial year. more
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View all 8 comments Below 8 comments
yes there are lot of loop holes that is why still we have so many scams and also money laundering taking place .It is only the salary people who pay taxes unlike our politicians who stack crores of cash at home in the bed /pillow /false ceiling etc and during election and other times they make it into white.It is ruining the parallel economy more
Mar 15
You can not catch all the fish in a sea. Just like that you can catch all tax dodgers. When you catch one you shoujd impose a severe penalty and communicate to the public. The fear of being abd caught and punished us a major deterrent. This is how the US Tax system works though it is said paying tax is voluntary! You voluntarily declare your income and pay taxes. more
Mar 15
Good question. What is "cash" transaction? And what if the bank or the registrar or the individual does not report the transaction? Who and how will the follow be done and what is the penalty? more
Mar 15
Despite all this surveillance, people know how to get around all these very easily. Usual methods are splitting-up of transactions, buying jewellery, transfer into foreign exchange, switch through a retail outlet or petrol pump or medical store where footfalls and cash collections are high. use of cash in smaller cities an towns, conversion into agriculturalland or simply run a parallel business in cash or be a member of a political party. more
Mar 15
