The Income Tax Department can send notices for five types of high-value cash transactions. These include cash deposits in bank accounts, credit card payments, property purchases, and investments in shares or mutual funds. The department monitors these transactions to ensure tax compliance and prevent evasion.
Here are the five high-value cash transactions that the Income Tax Department monitors, listed point-wise:
- Cash Deposits in Bank Accounts:
- Depositing more than ₹10 lakh in a savings account within a financial year is reported.
- Fixed deposits exceeding ₹10 lakh are also reported.
- Credit Card Payments:
- Cash payments of over ₹1 lakh for credit card bills in a financial year raise flags.
- Total credit card payments exceeding ₹10 lakh through any mode in a financial year are reported.
- Property Purchases:
- Paying ₹30 lakh or more in cash for property transactions is reported by the property registrar to the Income Tax Department.
- Investments in Financial Instruments:
- Investing ₹10 lakh or more in shares, mutual funds, bonds, or debentures within a financial year is reported by the investment company.
- Cash Payments for Goods and Services:
- Payments exceeding ₹2 lakh in cash for any goods or services are reported by the seller.
