You could end up with an income tax notice due to these cash payments - The tax man is watching you for these transactions (2024)

Updated: 17 Jan 2022, 01:00 PM IST

The tax man is watching you for these transactions

Making certain expensive or big-ticket transactions in cash can turn the Income-Tax Department's gaze to you. The tax man is always on the lookout for high-value cash transactions, one slip up and you get slapped with a notice from the authorities. Banks, mutual fund houses, brokerages, registrar of properties and other financial intermediaries are obligated to inform the tax department if you transact via cash beyond prescribed limits. Listed below are six big-ticket cash transactions that can fetch you a income tax notice.

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Deposit in bank FD

The Central Board of Direct Taxes (CBDT) has made it clear that banks have to report occurrences when someone deposits, in one or more time deposits (other than that made through renewal of another time deposit), an amount aggregating to Rs 10 lakh or more in a financial year.

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Deposits in bank accounts

CBDT has made it mandatory for all banks, including cooperative banks, to report cash deposits aggregating to Rs 10 lakh or more during a financial year, in one or more accounts (other than a current account and time deposit) of an individual.

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Credit card bill payments

Payments made of an amount adding to Rs 1 lakh or more in cash towards credit card dues must be reported, states CBDT. Further, if one pays Rs 10 lakh or more to settle credit card dues in a financial year (in any mode), these transactions too need to be reported to the income tax department.

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Purchase of foreign exchange

Purchase of foreign exchange, including travellers cheque and forex cards, debit or credit cards, aggregating to Rs 10 lakh also needs to be reported.

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Purchase of these investment instruments

Financial institutions and firms issuing bonds or debentures must report receipts from any person of an amount totaling Rs 10 lakh or more in a financial year for acquiring such bonds or debentures. A similar limit is set for reporting the purchase of shares and mutual funds.

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Property payments

The property registrar is mandated to report to the tax authorities a purchase or sale by any person of immovable property for an amount of Rs 30 lakh or exceeding it.

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Debentures

bonds

You could end up with an income tax notice due to these cash payments - ​The tax man is watching you for these transactions (2024)

​The tax man is watching you for these transactions

​Deposit in bank FD

​Deposits in bank accounts

​Credit card bill payments

​Purchase of foreign exchange

​Purchase of these investment instruments

​Property payments

You could end up with an income tax notice due to these cash payments - The tax man is watching you for these transactions (2024)

The tax man is watching you for these transactions

Deposit in bank FD

Deposits in bank accounts

Credit card bill payments

Purchase of foreign exchange

Purchase of these investment instruments

Property payments