6 Cash Transactions That Might Put You in the Spotlight of the Income Tax Department

1. Real Estate Transactions:

- Property registrars must report property sales or purchases valued at ₹30 lakh or higher to tax authorities.

- They need to share details like buyer and seller names, transaction date, property type, location, and price.

- This helps the tax department monitor cash transactions and detect tax evasion and money laundering.

2. Stocks, Mutual Funds, Debentures, and Bonds:

- Companies issuing bonds, debentures, or shares must report receipts of ₹10 lakh or more from individuals within a financial year.

- Information includes investor details, purchase date, amount, and the type of security acquired.

- This helps identify individuals not disclosing their income or engaging in suspicious investments.

3. Foreign Currency Transactions:

- Any purchase of foreign exchange exceeding ₹10 lakh during a financial year must be reported.

- Reporting applies to individuals, HUFs, and partnership firms, but not companies.

- Transactions include buying currency notes, travelers' checks, or using debit/credit cards for foreign payments.

- This is to deter tax evasion and money laundering.

4. Cash Deposits in Bank Accounts:

- Banks must report cash deposits of ₹10 lakh or more within a financial year, excluding current accounts and time deposits.

- Details include the depositor's information, PAN number, deposit date, amount, and account numbers.

- This helps identify individuals not revealing their complete income or making questionable deposits.

5. Money in Fixed Deposits (FD):

- Banks report when an individual accumulates ₹10 lakh or more in FDs within a financial year, excluding renewals.

- Information shared includes depositor's details, PAN number, deposit date, amount, and account numbers.

- This helps detect individuals underreporting income or making suspicious deposits.

6. Credit Card Payments:

- Credit card issuers must notify the tax department about cash payments of ₹1 lakh or more for credit card balances.

- If an individual pays credit card dues of ₹10 lakh or more in a fiscal year, it must be reported.

- Reporting includes the cardholder's details, PAN number, payment date, amount, and payment method.

- This requirement helps identify individuals not accurately disclosing their income or engaging in questionable credit card payments.

These reporting measures are in place to prevent tax evasion and money laundering by monitoring significant cash transactions in various financial activities.