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  

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  
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  
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  
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  
Useful more  
Post a Comment

Related Posts

    • Special airline fares for emergency and bereavement

      This is just a wonderful wonderful idea to restrict airline loot.

      By Reeta Kumar
    • Inconvenience because some VIP wants to show off

      So japanese ambassador hired an army of security guards and Govt officials to clear the platform in Mumbai and the coach for this stupid photo-op ! What a joke ! Inconveniencing thousands of citize...

      By Shivani Khiste
    • Seperate category for bereavement air fares

      As well as medical emergencies should be the norm in India. Mumbai Times of India is quoting attached LocalCircles survey saying that either fare caps must be reintroduced or a seperate category of...

      By Seema Shah
    • Digital India has issues

      Sony Liv takes 90 days to cancel a subscription. Even monthly subscription. HDFC doesn’t let you cancel auto-pay online seamlessly. So you have to go to the branch and fill a form...

      By Sudesh Rai
    • Gutka Or chewable tobacco ban a must

      We have 4-5 members in the extended family who are addicted to this and 4-5 times a day they must have the Gutka. It is available easily and unless supplies are shut down nothing will happen. All t...

      By Shivani Batra
    • RBI not doing well on 2000 rupee

      If you want to exchange RS2000 at HDFC Bank, people must carry a valid government ID Proof without KYC people can't exchange single 2000 note. RBI must clarify in people interest is KYC mandatory o...

      By Ajay Dutta
    • Ashamed of our cricket and bollywood stars

      Kapil Dev, Gawaskar, Sehwag from cricket and the video teacher below Shahrukh Khan, Ajay Dewgan, Akshay Kumar and even Amitabh Bachchan are all doing pan masala ads teaching the next generation how...

      By Shweta Kotharii
    • Tax BCCI

      Govt will establish fresh regulations and ways to impose additional tax on existing taxpayers but won't amend laws to include BCCI in the tax bracket, one of the World's richest sports body that ge...

      By Shailesh Deshmukh
    • Is aviation minister facilitator of airline loot

      A friend who was booking this am said the airfare from Delhi to Leh, one way is now Rs 30,000 in economy class. The Govt by removing fare cap has made a gross mistake something that ena...

      By Seema Mehra
    • Approach with wrestlers must change

      The way wrestlers were handled by Delhi Police was very inappropriate and this approach must be corrected. Can you imagine the Delhi Police ever dragging Rohit Sharma, Virat Kohli, Sachi...

      By Neelam Bose
    • Values for the new parliament

      So well articulated in here by our bollywood badshah. Let us all ensure that we dont elect any parliamentarian who divides people, polarises people, is corrupt, doesnt respect women or has criminal...

      By Ruchika L Maheshwari
Enter your email and mobile number and we will send you the instructions

Note - The email can sometime gets delivered to the spam folder, so the instruction will be send to your mobile as well

All My Circles
Invite to
(Maximum 500 email ids allowed.)