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Writer's pictureCA Umang Jain

Tax notice may come for these 5 cash transactions, read to know more

Updated: Feb 25, 2023

So, if you are not filing ITR, or filing ITR with incorrect particulars, just know that you can have a notice from income tax department.



Tax Notice may come for these 5 cash transactions
Tax Notice may come for these 5 cash transactions


1. Bank Fixed Deposit (FD):


If you deposit Rs 10 lakh or more and make an FD once or more than once in a year, the IT Department may ask you about the source of the money. In such a situation, if possible, deposit most of the money in FD through online medium or through cheque.


2. Bank savings account deposits:


If a person deposits Rs 10 lakh or more in cash in one account or more than one account in a financial year, the IT Department can question the source of the money. The maximum limit in current accounts is Rs 50 lakh.


3. Payment of credit card bill:


Many times, people also deposit credit card bill in cash. If you deposit more than Rs 1 lakh in cash as a credit card bill at one go, then the Income Tax Department can question you. On the other hand, if you pay a credit card bill of more than Rs 10 lakh in cash in a financial year, you can also be asked about the source of the money.


4. Property Transaction:


If you do a big transaction in cash with the property registrar, then its report also goes to the Income Tax Department. If you buy or sell a property worth Rs 30 lakh or more in cash, then the information will go to the Income Tax Department on behalf of the property registrar.


5. Purchase of Shares, Mutual Funds, Debentures and Bonds:


If you do large cash transactions in shares, mutual funds, debentures and bonds then you may face problems. Cash transactions in such instruments can be done only up to a maximum of Rs 10 lakh in a financial year. So, if you have any plan to invest money in any of these, then the first thing to keep in mind is that you do not have to use large amounts of cash.


We hope the above blog was helpful in enhancing your knowledge on the matter. In case of any queries feel free to get in touch with our team of experts.


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CA Umang Jain

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umang@caumang.com


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