|| Income Tax Notice || Cash Transaction Limit ||
The income tax department in India is responsible for administering and enforcing the country’s income tax laws. One aspect of this involves monitoring and tracking cash transactions to ensure that they are reported and taxed appropriately.
Income tax department have become very vigilant about cash transactions these days and has tightened the rules for cash transactions for the general public on various investment platforms.
As per the income tax laws in India, any cash transaction above a certain threshold must be reported to the income tax department. The current threshold for cash transactions is Rs 2 lakhs in a single day or Rs 10 lakhs in aggregate in a financial year.
This means that if you engage in a cash transaction that exceeds these thresholds, you are required to report it to the income tax department. This can be done through the income tax website or by contacting the nearest income tax office.
Failure to report cash transactions above the threshold can result in penalties and fines, as well as possible criminal charges. It is important to ensure that you are compliant with the income tax laws regarding cash transactions to avoid any legal consequences.
Here are 5 cash transactions, which can put you in trouble-
- Bank Deposit (Fixed Deposit)– if you deposit Rs. 2 Lakh or more in cash in one account in a single day or Rs. 10 Lakh for fiscal year then you have to report the transaction and income tax department can question the source of money.
- Saving Account Deposit- Same is the case with saving account deposit. If a person deposit cash amount exceeding threshold limit of 2 lakh in single day or Rs. 10 lakh in fiscal year then you will land in trouble if you do not report source of transaction.
- Credit Card bill- Payment of credit card bill also have a limit for cash transaction. If you pay bill of 1 lakh in cash or total of 10 lakh in fiscal year then source can be questioned.
- Purchase of Shares, Mutual Fund– If you do large cash transactions in shares, mutual funds, debentures and bonds then you may face problems. Cash transactions in such instruments can be done only up to a maximum of Rs 10 lakh in a financial year.
- Property Transaction– If you buy or sell a property worth Rs 30 lakh or more in cash, then the information will go to the Income Tax Department on behalf of the property registrar.
Along with these transactions in India, the cash transaction limit is currently set at ₹2 lakh. This means that if you deposit or withdraw more than ₹2 lakh in cash in a single day, the bank is required to report the transaction to the Reserve Bank of India (RBI).
The cash transaction limit in India applies to both individual and business transactions. It is part of the government’s efforts to curb black money (unreported income) and promote the use of digital payments.
In addition to the cash transaction limit, there are also limits on the amount of cash that can be carried across the border into or out of India. Indian citizens are allowed to carry up to ₹25,000 (about $340) in cash when they travel abroad, while foreign nationals are allowed to bring up to ₹5,000 (about $68) into the country.
It’s worth noting that these limits are subject to change and may be revised by the government from time to time. It’s always a good idea to check the current limits before making a large cash transaction or carrying a significant amount of cash with you when traveling.
For more detail please visit (https://incometaxindia.gov.in/Pages/press-releases.aspx)
Ques– What is cash transaction limit in India?
Ans- In India cash transaction is limited to 2 Lakh in single day or 10 lakh in fiscal year,