Reasons for the IT Department's notice

In the event that a person engages in high-value cash transactions, the Income Tax Department is likely to issue a notice. These include banks, mutual fund firms, brokerages, and real estate registries. If the transaction's value exceeds a certain level, the income tax department must be notified. Few examples of transactions that may or may not have resulted in a notification from the IT Department: Depositing in Bank Account A bank account's cash deposit limit is INR 10 lakh. The income tax authorities may issue a tax notice to someone who deposits more than INR 10 lakh in a single financial year in a savings account. Cash deposits and withdrawals over INR 10 lakh in a financial year must be reported to the tax authorities. In current accounts, the limit is INR 50 lakh. Depositing in Bank FD There should be no more than 10 lakh rupees in cash deposits in a bank FD. A bank depositor is advised not to deposit more than INR 10 lakh in a bank FD account while making a cash deposit. After a directive from the CBDT, banks are now required to declare whether or not a customer's total deposits in one or more fixed deposits are more than the statutory maximum. Buying or Selling Land To the tax authorities, the property registrar must disclose any investment or sale of immovable property above INR 30 lakh. Your Form No. 26AS should be used to record the sale or purchase of a property. To put it another way, if you're buying or selling property for more over INR 30 lakhs, you're in the IT department's sights. The buyer's tax return may be examined to see if he/she has disclosed the income. Credit Cards Bills Payment If you spend more than INR 1 lakh in cash to settle a credit card bill, the CBDT requires that you record it. Payments(any mode) of more than 10 lakh rupees in a year for credit card bills must also be made public to the tax authorities. Credit card purchases are subject to sales tax, which is the most important consideration. Because your credit card information is connected to your PAN Card, the government can readily monitor your online credit card activities, so you should make sure you don't go over your spending limit. When submitting an ITR, be sure to disclose any significant transactions. If you use credit cards for any high-value transactions, be sure to include them on Form 26AS when you file your ITR. Purchase and Sale of Foreign Currencies As long as an individual receives more than INR 10 lakh for the sale of foreign currency in a financial year, they must notify the income tax department of their receipt of such funds and any credit in such currency by debit or credit card as well as traveler's cheque, drafts or other instruments. Transactions of Stocks, Mutual Funds, and Bonds If you're planning to invest in a mutual fund, stock, bond, or debenture, you must keep your total cash investment under INR 10 lakh. Annual Information Return (AIR) statements of financial transactions have been produced by the I-T department in order to track high-value transactions of taxpayers In a given financial year, tax officials will collect information on unusually high-value transactions. The AIR section of your Form 26AS should be checked if any high-value transaction has been listed. The high-value financial transactions are summarised in PART -E of Form 26AS.

Reasons for the IT Department's notice