Tax Department has become highly worried about the cash transactions.
Today it has various tools through which it will find out that one has done high cash transaction.
For example, if a person invests in stock market via demand draft using cash, the broker will report about the investment in its balance sheet.
So, there is need to know the high cash transaction limit and one should keep one's cash transactions inside that limit and avoid getting any kind of income tax notice.
Story about the top 5 cash transactions that can attract income tax notice listed out the following :
1) Savings/Current account: For an individual person, the cash deposit limit in 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 crossing of this limit may also liable for income tax notice.
2)Bank FD (fixed deposit): Cash deposit in bank FD is allowed but it should not go over ₹10 lakh. Crossing of this ₹10 lakh limit is also not advisable for a bank depositor making cash deposit in bank FD account.
3) Credit Card bill payment: While paying credit card bill, one should not cross ₹1 lakh limit. Violation of this cash limit in credit card bill payment doesn't go well .
4) Mutual fund/stock market/bond/debenture: People investing in mutual funds, stocks, bond or debenture must ensure that its cash in the above mentioned investment options doesn't go beyond ₹10 lakh limit. Failing to maintain this cash limit may lead to income tax department checking your ITR.
5) Real estate: While buying or selling a property, one must make sure that cash transaction above ₹30 lakh is questionable as income tax department discourages cash transaction beyond this limit in a real estate deal.
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