Income Tax Tips: Know these rules before making these 5 transactions, otherwise you will get an income tax notice..
The trend of digital payment has increased a lot in the country, but still many people believe in making transactions in cash. The main reason for this is that most families in the country rely on old methods like keeping more cash at home, buying gold jewelery by paying cash, or making big purchases. A big reason for doing this is also that people want to stay away from the radar of Income Tax (Income tax notice).
They do not want to come under the eyes of the department. By the way, if you make purchases in cash within a limit, then there is no problem, but after a certain limit, you cannot make payments in cash. Doing this can prove to be costly for you because it will be difficult for you to respond when you receive an Income Tax notice. Let us know at which places you need to be careful while making payments.
1. Depositing cash in a bank account
According to the rules of the Central Board of Direct Taxes (CBDT), if a person deposits Rs 10 lakh or more in cash in a financial year, then Income Tax also gets information about it. If you deposit more than a certain limit, you will have to tell the income tax department where the money came from. That is, the department will ask you about the source.
2 Make a fixed deposit through cash
If you deposit more than Rs 10 lakh in cash and make an FD, the income tax department will ask about the cash source.
3 Buying property in cash after a limit
If you have made a cash transaction of Rs 30 lakh or more while buying a property, the property registrar will give its information to the Income Tax Department. So the income tax department will also ask you for information about where the money came from.
4 Credit card bill payment
If your credit card bill is Rs 1 lakh or more and you pay it in cash, the income tax department can still ask you about its source.
5 Buying shares, mutual funds, debentures or bonds
If you use more than a limited amount of cash to buy shares, mutual funds, debentures, or bonds, you may get an income tax notice. In such a situation, the income tax department can ask you how you got so much cash.
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