The Income Tax department keeps a tab on various types of transactions done using cash. Thus, making a high-value transaction in cash can lead to problems.
In this article, we will discuss five such types of cash transactions that can cause problems, when you file your Income Tax Returns (ITR).
The Income Tax department has become vigilant against cash transactions. Various financial entities, like Mutual Fund houses, Banks, etc., along with the Income Tax department, have tightened the rules on cash transactions. They allow people to transact in cash up to a certain limit. The Income Tax department will be notified, if an individual makes a cash transaction above the specified limit.
In case an individual makes a high-value cash transaction, he/she might receive a notice from the Income Tax department. Therefore, it is recommended to be mindful of high-value transactions, while filing ITR.
Cash transactions that are under the radar of the IT Dept.:
Payment of a Credit Card Bill
Payment of Rs 1 lakh or more in cash and Rs 10 lakh or more, by any mode, towards your Credit Card bills will be reported, as per the Central Board of Direct Taxes (CBDT) norms.
Bank Fixed Deposit (FD)
Cash Deposits in Bank Accounts
The cash deposit limit, in the case of Savings Accounts, is Rs 10 lakh. If a person deposits more than Rs 10 lakh in a financial year, then the Bank will report it. However, for Current Accounts, the limit is Rs 50 lakh.
Real Estate Transactions
If a person purchases or sells any real estate property that is valued at Rs 30 lakh or more, then the property registrar will report the sale or purchase transaction of the property.
Investments in Shares, Bonds, Mutual Funds, and Debentures
In case a taxpayer makes cash transactions of more than Rs lakh in a financial year in Shares, Bonds, Mutual Funds, or Debentures, then it will be reported to the Income Tax authorities.
If you want to file your ITR conveniently, then you should consider Net Banking with ICICI Bank. You can file your ITR in a few easy steps. Log in with your User ID and Password. Go to ‘Payments and Transfers’. After that, go to ‘Manage your Taxes’. Click on ‘Income Tax e-Filing’. After that, you will be redirected to the Income Tax India website.