As per Income Tax Act, there are limits to the cash transactions entered into by a person or an entity. Once this limit is crossed, it becomes punishable under the I-T Act. Through various platforms, the I-T Department makes sure that the rules are being followed such as bank, MF houses, broker platforms etc. A notice is served in case of failure to follow the limits placed on cash transactions. It is not easy to slip through the radar and one needs to be careful enough not to miss the follow up of the rules regarding cash transaction limits.
To keep the cash transaction below the permissible limit let us understand them in detail-
- Bank Fixed Deposits: There is a maximum limit up to which a cash deposit in bank FD can be put. You cannot deposit any amount more than Rs.10 lakh into your bank FD.
- Real Estate: The purchase and sale of property is limited to Rs.30 lakh by way of cash. If this limit is crossed the I-T Department will serve you a notice.
- Investment in Mutual Funds, Bonds, Debentures and Stocks: While investing in any of this kind of instruments, please do take care that the limit is a maximum of Rs.10 lakh in cash. The department will check your last ITR if this limit is violated.
- Savings or Current Account: Up to a maximum of Rs.1 lakh cash deposit is allowed in savings account and Rs.50 lakh cash deposit is allowed in a current account by an individual. Failure to do so will result in the department sending a notice to the defaulter.
- Credit card bill: The cash limit placed on payment of credit card bills is Rs.1 lakh. Such transactions are reportable by a bank.