Five transactions may bring I-T Notice

Five transactions may bring I-T Notice

The income tax department has become highly watchful against cash transactions these days. In the last few years, Income Tax Department and various investment platforms like banks, mutual fund houses, broker platforms, etc., have tightened the cash transactions rules for the public in general. These investment and lending institutions only allow cash transactions to a specific limit. In the case of a low violation, the Income Tax

Advising taxpayers to report high-value cash transactions in one's income tax return (ITR); Amit Gupta, MD at SAG Infotech, said, "If an individual makes high-value cash transactions, there are chances that they might get a notice from Department. The different cash-related transactions include property registrars, mutual fund houses, brokerages, and banks. The high-value transaction must always be reported to the income tax department if the value crosses a particular limit. The Income Tax Department has a deal with multiple government agencies to obtain financial records of individuals who spoil in high-value transactions but do not report them on their tax filing."

On top 5 cash transactions that may lead to an income tax notice, the Managing Director of SEBI registered income tax solution provider company listed out the following:

1] Bank fixed deposit (FD): Cash deposits in Bank FD should not exceed ₹10 lakh. The CBDT has announced that banks must reveal if individual deposits are more than the prescribed limit in one or more fixed deposits.

2] Bank savings account deposits: The cash deposit cap in a bank account is ₹10 lakh. Savings account holder deposits more than ₹10 lakh amount during a financial year, and the income tax department may provide an income tax notice. Meanwhile, the tax authorities must reveal cash deposits and withdrawals in a bank account crossing the ₹10 lakh limit in a financial year. In current reports, the cap is ₹50 lakh.

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3] Credit card bill payment: As per the CBDT norms, an amount of more than ₹1 lakh in cash against credit card bills should be reported to the income tax department. Additionally, if payment of ₹10 lakh or higher is paid in a financial year to settle credit card bills, the tax department must disclose the amount.

Any significant transaction should be disclosed while filing ITR. If you are using credit cards on any high-value amount transactions, make sure to reveal them on Form 26AS while filing your Income-tax returns to avoid getting an income tax notice," said Amit Gupta.

4] Real estate property sale or purchase: The property registrar must have to disclose any investment or sale of immovable property for any amount of more than ₹30 lakh to the tax authorities. So, in any real estate property purchase or sale, taxpayers are advised to report their cash transaction in Form 26AS as the property registrar would say about it.

5] Investment in shares, mutual funds, debentures, and bonds: Investors who invest in mutual funds, stocks, bonds, or debentures must ensure that their cash transaction in these investments does not exceed ₹10 lakh in one financial year. The income tax department has created an (AIR) Annual Information Return statement of financial transactions to trace high-value cash transactions of taxpayers. Tax officials will gather details against unusual high-value transactions on this basis in a particular financial year.

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