Income Tax Notice: Have you seen that someone living near you has received a notice from the Income Tax Department? He may be saying that he does not have that much money, but still he has received the notice. This can happen to you too, if you do transactions like this in your bank account. Know the whole thing from Income Tax Expert CA.
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Income Tax Notice: Income Tax Notice makes even the best of people sweat. Nowadays, the tax department is using Artificial Intelligence or AI. Because of this, income tax notices reach those who keep a lot of money in their bank accounts or those who make transactions. Once the notice reaches and you do not respond to it properly, you may have to face trouble from the income tax people. If you want that your account is not favoured by the Income Tax Department, for this you have to follow certain rules.
Keep these in mind while operating bank accounts
CA C. Kamlesh Kumar, taxation partner of income tax consulting firm Ravi Rajan & Co LLP, Delhi, says that if you have a savings account, you have to follow certain rules. Do not transact a large amount at once. This does not mean that you cannot deposit money in your savings account. You can deposit as much money as you want. But, if you deposit more money then the Income Tax Department might take a look at your account.
Banks have this instruction from the tax department
Usually banks have some instructions from the tax department. They are told that if there is a large transaction in an account, then give its information to the income tax department. Generally, if 10 lakh rupees or more is deposited in your savings account during a year, then your bank can give its information to the income tax department. Apart from this, if there are continuous large transactions in your account and it is not known where this money is coming from and where it is going, then you can come under suspicion. In such a situation, the income tax department can become active and you can be issued a notice.
Follow these rules
Kamlesh Kumar says that you should keep some things in mind while transacting in the savings account. By doing this you can avoid the hassles of income tax.
First rule: Keep an eye on big transactions. If you make a transaction of Rs 10 lakh or more, then the bank can give its information to the Income Tax Department. Then the tax department will want information about the source of this amount. If you are unable to tell where this money has come from, then you may get an income tax notice.
Second rule: Avoid frequent large transactions. If there are frequent large transactions in your savings account throughout the year. A lot of money is deposited and withdrawn. Then the bank may get suspicious. The bank can consider it suspicious and report it to the Income Tax Department.
Third rule: Give the bank correct and complete information about the source of the money. Do this especially when there is a big transaction. Also, you should have information about where this amount has come from. Where did this money come from? If this money has been given by someone else, then keep a complete account of it. Suppose, a relative of yours gave you ₹ 10 lakh, then you should have papers to tell that he has given this money.
Fourth rule: Keep a PAN issued by the Income Tax Department with you. Along with this, get KYC done as well. For big transactions, you must complete the process of PAN card and KYC (Know Your Customer).
Fifth rule: Any bank keeps an eye on every account holder. The bank keeps an eye on the activities in your account. Especially on large or unusual transactions. If the bank finds something wrong, it can ask you where this money came from? The bank can also ask for information by sending you a notice.
