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cash transaction
There is no harm in doing small shopping with cash, but here are 5 high value cash transactions that can cost you dearly. You can get a notice (Income Tax NOTIS) as soon as the Income Tax Department gets a clue. Let’s know about them.
Even though now is the era of digital payment, but even today many people find it easier and better to do cash transactions. However, many people also do cash transactions as they want to stay away from the income tax department’s radar. Although there is no harm in doing small shopping with cash, but there are 5 high value cash transactions that can cost you dearly. You can get a notice (Income Tax Notice) as soon as the Income Tax Department gets a clue. Let’s know about them.
1- Depositing money in bank account
According to the rules of the Central Board of Direct Taxes (CBDT), if someone deposits Rs 10 lakh or more in cash in a financial year, it is reported to the Income Tax Department. This money can be deposited in one or more accounts. Now because you are depositing more money than the prescribed limit, then the Income Tax Department can ask you about the source of this money.
2- Depositing cash in Fixed Deposit
Just like the question arises of depositing more than Rs 10 lakh in a bank account in a financial year, the same happens with FDs. If you deposit more than Rs 10 lakh in one or more FDs in a financial year, the Income Tax Department may question you about the source of the money if there is any doubt.
3- Big transaction of property
If you have done a cash transaction of Rs 30 lakh or more while buying a property, then the property registrar will definitely inform the Income Tax Department about it. In such a situation, due to such a big transaction, the Income Tax Department can ask from where you brought the money.
4- Payment of credit card bill
If your credit card bill goes up to Rs 1 lakh or more and you pay it in cash, you may still be asked what is the source of the money. On the other hand, if you pay Rs 10 lakh or more in any financial year in any way, then the Income Tax Department can question you from where you brought the money.
5- Buying shares, mutual funds, debentures or bonds
If a large amount of cash is used to buy shares, mutual funds, debentures or bonds, the Income Tax Department also becomes alert. If a person does a transaction of Rs 10 lakh or more, then his information reaches the Income Tax Department. In such a situation, the Income Tax Department may ask you from where you brought the cash.
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