High-Value transactions are transactions that are incurred in high denominations. For the last few years, the income tax department is shaking hands with all the other related government departments from which it can procure financial information and trace all the persons who are spending high amounts but are not filing income tax returns or are not paying taxes according to income earned, which may attract Income Tax notice.
Speaking on the various cash transactions that may lead to an income tax notice, Mumbai-based tax and investment expert Balwant Jain said, “One needs to remain alert while doing any kind of high-value cash transaction because the IT Department has become highly vigilant about the cash transactions. Today it has various tools through which it will find out that one has done high-value cash transactions. For example, if a person invests in the stock market via demand draft using cash, the broker will report about the investment in its balance sheet. So, there is a need to know the high-value cash transaction limit and one should keep one’s cash transactions inside that limit and avoid getting any kind of notice.”
Asked about the top 5 cash transactions that can attract income tax notice, Balwant Jain listed out the following:
1. Savings/Current account: For an individual, the cash deposit limit in a savings account is ₹1 lakh. If a savings account holder deposits more than ₹1 lakh in one’s savings account, then the IT department may send an income tax notice. Similarly, for current account holders, the limit is ₹50 lakh and on violation of this limit may also liable for an income tax notice.
2. Credit Card bill payment: While paying a credit card bill, one should not cross the ₹1 lakh limit. Violation of this cash limit in credit card bill payment doesn’t go well with the IT Department.
Also, Read This: Income Tax Department ITR Refund List: Check Your Status Online
3. Bank FD (fixed deposit): Cash deposit in bank FD is allowed but it should not go beyond ₹10 lakh. Violation of this ₹10 lakh limit is also not advisable for a bank depositor making a cash deposit in one’s bank FD account.
4. Investments in Financial Securities: People investing in mutual funds, stocks, bonds or debentures must ensure that its cash infusion in the above-mentioned investment options doesn’t go beyond the ₹10 lakh limit. Failing to maintain this cash infusion limit may lead to the income tax department checking your last Income Tax Return (ITR).
5. Immovable Property: The Registrar of properties will have to report purchase & sale of all immovable property exceeding Rs 30 Lakh to the Income Tax authorities.
6. Foreign Currency expenses: Expenditure in foreign currency via debit card, credit card, or traveler’s cheque for the amount Rs.10 Lakh or above in a year. If you do pay more than Rs.10 lakhs in foreign currency expenses through a debit/credit card in a financial year then the Credit Card Company will report to the Income Tax authority.
If lone amount is credited in my account income tax admissible, what I do now