INCOME TAX

Cash transactions of substantial amounts can be flagged by the ITD due to their suspicious nature. The department has stringent regulations in place for such transactions in order to help thwart illegal activities. 

It is a common misbelief that cash transactions are less traceable. Banks are required to inform the ITD when transactions beyond a designated limit are made. The ITD also uses data analytics tools to evaluate any disparities between declared income and transactions made. 

Here are 5 high-value cash transactions that trigger I-T notice:

A cash deposit surpassing ₹10 lakh in a single or combined financial year across all your savings accounts would attract attention from the ITD. This policy stands true even if the deposit is divided among multiple accounts. 

Similarily, any fixed deposit surpassing ₹10 lakh in one financial year would invite scrutiny from the department. 

Making investments in shares, mutual funds, and bonds through cash transactions surpassing ₹10 lakh could result in a notice from the ITD. 

Although there is no specific threshold for credit card bill payments in cash that mandates scrutiny from the ITD, the office automatically seeks information regarding the source of your funds if you make a payment surpassing ₹1 lakh for a monthly credit card bill.

If you purchase a property valued above ₹30 lakh in India, the ITD requires you to disclose the source of your funds. The threshold for compulsory declaration of the origin of your funds is ₹50 lakh for urban properties and ₹20 lakh for rural.