Here is a list of common cash transactions that could attract the eyes of the I-T department:
Exceeding Rs 10 lakh in cash deposits or withdrawals from a savings bank account in a fiscal year. The Central Board of Direct Taxes (CBDT) wants banks to report any such transaction. Even if the deposits are spread across multiple accounts, any total amount crossing Rs 10 lakh will still attract the attention of the I-T department. An amount of over Rs 10 lakh in an account does not necessarily suggest tax evasion, but it certainly demands scrutiny.
Exceeding Rs 50 lakh in cash deposits or withdrawals from a current account in a fiscal year.
Over Rs 10 lakh in cash is deposited into a fixed deposit (FD) account in a fiscal year.
Sales or purchases of the immovable property exceed Rs 30 lakh in a financial year.
Investments in cash worth more than Rs 10 lakh in a financial year in stocks, mutual funds, debentures, and bonds.
Exceeding Rs 1 lakh in cash payments for credit card bills in a fiscal year.
Exceeding Rs 10 lakh in a fiscal year in payments made for credit card debt using any method other than cash.
Sale of foreign currency of more than Rs 10 lakh in a fiscal year.
Using cash transactions of over Rs 10 lakh to invest in mutual funds, shares, bonds, or debentures,
If you are unsure about the declaration of the source of funds, you must seek advice from a financial advisor. This would help you to manage your finances better and escape the ire of the I-T department.