Prevent Income Tax notice by being aware of 7 risky transactions such as cash deposits, foreign travel, and credit card payments. Be safe and abide by rules.
Anisha Kumari | May 12, 2025 |
Be Warned! These 7 Transactions Will Land You an Income Tax Notice
If one makes large money transactions without going by the book, they might receive a notice from the Income Tax Department. The department keeps a keen eye on where money is taken or sent. If something is not right, a notice might be issued. In order to avoid that, it’s best not to make these 7 kinds of transactions unknowingly. Even a chartered accountant may not be able to help if there’s a problem. So it’s better to be careful.
Here are the 7 transactions that can lead to trouble:
If someone spends more than Rs. 2 lakh in a year on travelling abroad, this information goes to the Income Tax Department. They may check whether the income matches the expense.
When the total annual spending on a credit card is over Rs. 2 lakh, it might attract the notice of the department. Such expenditure might be suspect.
If a person pays over Rs. 1 lakh in cash to settle a credit card dues, the Income Tax Department has the right to verify the source of the amount. If it appears suspicious or remains undeclared, a notice and even penalty will follow.
If an individual invests over Rs. 10 lakh in stocks, bonds, or mutual funds during a year, the department might like to know the source of the funds.
Purchasing a property or house for more than Rs. 30 lakh is automatically reported to the Income Tax Department. They might verify whether the individual’s income is sufficient enough to make such a large transaction.
If over Rs. 10 lakh cash is deposited into a bank account within a year, it can result in a notice. The individual might be required to tell them where the money came from.
If any business transaction is made in cash for over Rs. 50,000, the Income Tax Department may request information. They might want to ensure everything is okay.
Individuals must obey tax regulations and have their money affairs in order. Making large transactions without proper documentation can lead to trouble, such as a notice, penalty, or even prosecution.
In case of any Doubt regarding Membership you can mail us at [email protected]
Join Studycafe's WhatsApp Group or Telegram Channel for Latest Updates on Government Job, Sarkari Naukri, Private Jobs, Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!"
