List of 6 High-Value Cash Transactions that can get you an Income Tax Notice.Cash Transaction that will attract an Income Tax Notice from the IT Department.
High-Value Cash Transactions that can get you an Income Tax Notice
Transacting in big-ticket or high-value cash transactions can land you in trouble with the Income Tax Department. There are various cash-related transactions that the taxman keeps a close watch on; entities like banks, mutual fund houses, brokerages, and registrar of properties will have to inform the tax department if you transact via cash beyond the specified limit.
Here is a look at some of the high-value cash transactions that can that can get you a notice from the income tax department.
1. Cash deposit in FD: The Central Board of Direct Taxes (CBDT) has said that banks have to report if a person deposits in one or more time deposits (other than a time deposit made through renewal of another time deposit) an amount aggregating to Rs 10 lakh or more in a financial year.
2. Cash deposits in bank accounts: CBDT has made it mandatory for a bank or a cooperative bank to report cash deposits aggregating to Rs 10 lakh or more during a financial year, in one or more accounts (other than a current account and time deposit) of a person.
3. Credit card bill payments: Payments made of an amount aggregating to Rs 1 lakh or more in cash towards credit card dues will have to be reported, says CBDT. Further, if one pays Rs 10 lakh or more to settle credit card dues in a financial year (via any mode), these transactions will also have to be reported to the tax department.
4. Property transactions: The property registrar will have to report to tax authorities “purchase or sale by any person of immovable property for an amount of Rs 30 lakh or more.”
5. Purchase of shares, mutual funds, debentures, and bonds: Companies or institutions issuing bonds or debentures will have to mandatorily report receipt from any person an amount aggregating to Rs 10 lakh or more in a financial year for acquiring bonds or debentures. A similar limit is set for reporting the purchase of shares and mutual funds.
6. Purchase of foreign exchange: Purchase of foreign exchange, which includes traveler’s cheque and forex cards, debit or credit cards, aggregating to Rs 10 lakh is reported to the tax department.