? New Cash Transaction Alert: Income Tax Department Keeping a Close Eye on Cash Transactions These Days ?️♂️.
In recent times, the Income Tax Department has significantly tightened its grip on cash transactions, introducing stricter rules across various investment platforms including banks, mutual fund houses, and brokerages. It’s crucial to stay informed about these updates to avoid any potential issues. Here’s what you need to know:
Bank Fixed Deposits (FDs)
When it comes to fixed deposits, it’s important to note that cash deposits exceeding Rs 10 lakh can now raise red flags. The Central Board of Direct Taxes (CBDT) has mandated that banks must disclose any individual deposits surpassing this limit. Stay within the prescribed boundary to evade any unwanted attention.
Bank Savings Accounts
For your savings account, the cash deposit threshold stands at ₹10 lakh. Going beyond this limit during a financial year could lead to an Income Tax notice. Remember, transactions over ₹10 lakhs, whether deposits or withdrawals, must be reported to the tax authorities. This limit is higher for current accounts, capped at ₹50 lakhs.
Credit Card Bill Payments
According to the latest CBDT guidelines, payments of ₹1 lakh or more in cash for settling credit card bills should be reported to the Income Tax Department. Furthermore, if your total credit card bill settlements cross ₹10 lakhs in a financial year, it’s mandatory to disclose these payments to the tax department.
Real Estate Transactions
When dealing with real estate, be aware that property registrars are obligated to inform tax authorities about property investments or sales exceeding ₹30 lakhs. Therefore, it’s advisable to diligently report any cash transactions related to real estate in Form 26AS. This transparency will align with the Registrar of Property’s reporting.
Investing in Financial Instruments
If you’re considering investments in shares, mutual funds, debentures, or bonds, bear in mind that any cash transactions in these domains exceeding ₹10 lakhs in a financial year should be avoided. Staying under this threshold will help you maintain compliance with the Income Tax Department’s guidelines.
To track substantial cash transactions by taxpayers, the Income Tax Department has introduced the Annual Information Return (AIR) statement. This mechanism helps detect unusually high-value transactions in a specific financial year, ensuring transparency and accountability.
Stay informed, follow these updated cash transaction rules, and safeguard yourself from unnecessary tax scrutiny. By adhering to these guidelines, you’ll not only maintain compliance but also ensure a smooth financial journey.
