Wednesday, December 7, 2022

What is the relationship between transacting in excess cash and income tax?

If you transact a large amount in cash then you can fall in the eyes of the income tax department. Today we are going to tell you that if you do most of your big transactions in cash, then what does income tax say on it?

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Income tax and your transaction’s report

Talking about today’s modern era, making payments through online platforms i.e. making digital payments provides a lot of convenience to the income tax and along with it, the finance department of the government in keeping an eye on your bank account or other financial resources.

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Income tax notice

On the other hand, if you do a transaction in the opposite case and that too a big transaction, then the income tax becomes alert and can also send you a legal notice for certain reasons. Below we have discussed these reasons.

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What is the relationship between transacting in excess cash and income tax?

  1. First of all, if you deposit a large amount in your bank account as cash. Suppose you deposit an amount of INR 10,00,000 or more in your bank account in a financial year, then in such a situation you may get an income tax notice.
  2. Along with this, if you are getting FD in the bank and you deposit more than 10 lakh rupees in cash within 1 year on that fixed deposit, then you may also have to face income tax notice. You have to tell the Income Tax Department about all the money deposited in your FD account, from where did you get so much money?
  3. If we talk about the the bill payment of a credit card, then if you deposit more than one lakh as your credit card’s bill in cash in 1 month, then you can face an income tax notice. On the other hand, if we talk about the whole year (In a financial year), then if your credit card bill crossed INR 10 lakhs and you deposited it in cash, then you may have to spin the Income Tax Department.
  4. Along with this, if you have bought or sold any land and the total value of that land purchased or sold is more than INR 30,00,000 then, in such a situation you should have complete information about where the cash came from. If any notice is issued on this, then you will have to share that complete information with Income Tax about the source of money.