High-value transactions: The Income Tax Department keeps a strict eye on 10 high-value transactions like Rs 10 lakh+ cash deposits in bank accounts, FD investments, credit card bills, share trading, property deals etc.
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High-value transactions: How does your account come under the radar? The Income Tax Department not only taxes your salary or business income, it also continuously collects data on select transactions. The purpose is to prevent tax evasion, control black money, and understand the source of large expenditures, so as to distinguish between genuine taxpayers and suspicious transactions.
Large Cash Deposits in Savings Accounts
If you have cash deposits exceeding ₹10 lakh in your savings account over a year, the bank transmits this information directly to the Income Tax Department through its system. This isn’t illegal, but the department wants to see if the source of such a large cash entry is related to salary, business, property sale, gift, or any other legitimate reason.
High-Value Cash Investments in FDs
Investing cash of Rs 10 lakh or more in a fixed deposit puts the transaction in the high-value category. Such large cash investments are reported to the tax system to check for any significant mismatch between your declared income, ITR, and your investment.
Large Credit Card Bill Payments
If you pay more than ₹1 lakh in cash or ₹10 lakh online/through a bank in a year, this is also a reportable transaction. Here, the department tries to understand whether your card spending matches your declared income, i.e., whether your lifestyle is too high.
A Big Game in Shares, Mutual Funds, and Bonds
Any purchase or sale of shares, mutual funds, or bonds worth more than ₹10 lakh per year is also accessed through the income tax database. This makes cross-checking the correct reporting of capital gains, losses, and related taxes easier, especially for those who earn substantial profits from the market but underreport them in their ITR.
Property and Cash Deals
In real estate, property purchases and sales worth more than ₹30 lakh are automatically recorded in the system, and the risk increases if significant cash is involved in the transaction. The focus here is on ensuring that the property value and payment method do not imply underreporting or hidden cash.
Jewellery, Foreign Travel and Lockers
PAN is required for jewellery purchases exceeding ₹2 lakh, and this data is directly transmitted to the IT system to prevent black money from being parked in gold and silver. Similarly, large expenditures on international travel packages or the source of high-value jewellery/gold stored in lockers may also come under scrutiny if necessary.
Large Digital Payments and Self-Defense Tips
If businessmen transact large amounts through UPI or digital payments, this data can be used to cross-check the business’s actual income. To avoid tax notices, it’s important to document the source of every large transaction, show the correct income in your ITR, and be careful with cash movements in your PAN-Aadhaar linked account.
