If you do most of your financial transactions in cash, be careful now, otherwise be prepared for income tax notice. In order to reduce cash expenses, to increase digital trends, the Income Tax Department and banks, mutual, broker platforms, etc. have urged to reduce cash transactions. Over the years, banks have also tightened many regulations to reduce cash transactions. These five financial transactions have to be taken care of otherwise the Income Tax Department can issue notice:
1) Bank FD
Cash deposit is allowed in the bank’s FD, but it should not exceed Rs 10 lakh. This is not good for both the depositor and the bank providing the FD facility. The bank’s FD account will have deposits in excess of this limit and the depositor can be issued an income tax notice by the Income Tax Department.
2) Immovable Property
A person who invests money in real estate should always keep in mind that its cash transaction limit is up to 30 lakh rupees. If you invest more than 30 lakh rupees in real estate, then you may get into trouble. The Income Tax Department allows cash up to Rs 30 lakh to buy or sell property in the heart of real estate. Cash transactions above Rs 30 lakh should be avoided, otherwise the Income Tax Department may issue a notice.
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3) Savings Account and Current Account
The limit for depositing cash in a savings account is Rs 1 lakh. If a person deposits more than Rs 1 lakh in a savings account, the Income Tax Department can send a notice to him. Current account limit is 50 lakh rupees. If more than this amount is deposited, the Income Tax Department can take action.
4) Mutual funds, stock market, bonds, debentures
Those who invest money in mutual funds, stock market, bonds or debentures have to keep in mind that no more than Rs 10 lakh in cash can be deposited at one time. Violation of this rule can lead to prosecution. You can see the details in the Income Tax Return (ITR).
5) Payment of credit card bills
When paying credit card bills, beware of cash transactions. The payment of more than 1 lakh rupees at a time cannot be made in cash for the payment of credit card bills. In case of violation of this rule, the Income Tax Department can issue a notice to you.
