Depositing Over Rs. 10 lakh? Here’s What You Must Know To Stay Tax-Compliant

These days, the Income Tax Department keeps an eye on huge bank transactions. With the help of AI (Artificial Intelligence), it can now track unusual activity in your bank account more easily. Because of this, making large deposits or transfers might lead to a tax notice even if your money is legal.

To avoid notice an investigation problems, it’s important to know the rules about bank transactions.

Bank Account Transaction Rules

Tax experts recommend avoiding large lump-sum deposits. In case total deposits exceed Rs.10 lakh in a financial year, banks are required to report the payments to the Income Tax Department, which may result in an investigation or a notice.

Bank Account Rules

PAN and KYC compliance are mandatory for high-value transactions. Banks closely monitor account activity and may flag or question any unusual deposits. Adhering to regulatory guidelines helps minimize the risk of receiving a notice from the Income Tax Department.

Savings Account Rules

For large-value transfers above Rs. 10 lakh, it’s necessary to maintain a clear record of the source of funds. Repeated large transactions can result in investigation from the tax authorities. Always retain supporting documents, including gift deeds, bank statements, or sale agreements, to prove the legality of the funds, especially if received from relatives or other sources.