By: ABP News Bureau | Updated at : 17 Apr 2024 04:37 PM (IST)
Income Tax Alert: Any cash deposit exceeding Rs 10 lakh in a financial year across savings accounts draws the attention of the income tax department. ( Image Source : Getty )
In recent times, a misconception has been prevalent among the people regarding the traceability of cashless transactions by the Income Tax Department (ITD). However, contrary to popular belief, the ITD utilises advanced tools to scrutinise transactions, leaving no room for evasion. Transactions exceeding specified thresholds, whether through card payments, UPI transactions, or cash deposits and withdrawals, are promptly reported to the tax offices by banks and financial institutions.
Leveraging sophisticated data analytics, the income tax department verifies this information with various sources, constructing a detailed financial profile to detect any disparities between declared income and expenses. The ITD's proactive measures in scrutinising financial transactions underscore the government's commitment to combating tax evasion and promoting transparency.
Large Cash Deposits: Any cash deposit exceeding Rs 10 lakh in a financial year across savings accounts draws the attention of the income tax department. Even if deposits are spread across multiple accounts, the cumulative amount beyond the threshold triggers scrutiny.
Fixed Deposits: Surpassing the Rs 10-lakh limit in fixed deposits within a financial year prompts inquiries regarding the source of funds, aligning with efforts to prevent tax evasion. If you deposits over Rs 10 lakh in FDs, the tax department may inquire about the source of the money, if needed.
Investments in Securities: Cash investments in shares, mutual funds, and bonds exceeding Rs 10 lakh may lead to tax notices, highlighting the importance of transparency in financial dealings.
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Credit Card Bill Payments: Cash payments towards credit card bills exceeding Rs 1 lakh are subject to scrutiny, highlighting the need for clarity on the source of funds.
Property Transactions: Property acquisitions above Rs 30 lakhs mandate disclosure of the fund's origin, with stricter thresholds in certain regions, aiming to curb tax evasion and money laundering.
Ensuring compliance with tax regulations is paramount to avoid penalties and investigations. Proper documentation substantiating the source of funds, including bank statements and investment records, is crucial when addressing ITD inquiries.
Tax experts states the importance of aligning tax returns with income and expenses to prevent unwarranted scrutiny. Transparent disclosure of financial activities ensures compliance with tax laws, fostering a culture of accountability and integrity in financial dealings.
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