Cash Transaction Rules: The Income Tax Department keeps an eye on every kind of transaction of the people. As soon as the department suspects any irregularity or comes to know about the violation of rules, immediate action is taken. The department has also fixed the limit of transactions in the accounts, on violating this limit, the Income Tax Department sends a notice and seeks a reply from the concerned person.

If you make more transactions than the limit in the account in a year, then you will have to face the notice of the department in any case and will have to answer. Therefore, it is very important to know about the rules for transacting in the account (cash transaction new rules) beforehand.

The department will send notice on these transactions-

1. You can also get a notice from the Income Tax Department if you deposit Rs 10 lakh or more in cash (cash payment limit) in the account in a financial year. While giving information about this to the department, you will have to tell from which source this cash has been received.

Even if this amount is deposited in one or more accounts in one go or many times, it is necessary to give information about it to the department. However, banks themselves give this information to the Income Tax Department. If you hide it, you may have to pay heavily for replying to the notice (how to reply to IT Notice).

2. Even if you deposit Rs 1 lakh in cash for a fixed deposit, the Income Tax Department can send you a notice. You will have to answer this as well.

3. Even if you pay a credit card bill of Rs 1 lakh (credit card rules) in cash, you may get a notice. Every notice of the department should be answered correctly within the stipulated time limit. It is very important to understand the questions asked on receiving the notice (IT notice new rules). Answer it accordingly.

4. If you pay Rs 10 lakh or more in any form in a financial year, it is necessary to give information about it to the department. You may have to answer the notice (IT notice rules) on this amount even on cash transactions or online transactions (online transaction rules).

5. A huge amount of money is transacted in property purchase and sale. You can get a notice from the Income Tax Department as soon as you make a cash payment of more than Rs 30 lakh. You must give information about this transaction to the Income Tax Department, otherwise, it can also be considered as income concealment.

In the notice, you can be asked where this cash (cash limit rules) came from and you will have to give a satisfactory answer with proof. If the department is not satisfied with your answer, other action can also be taken.

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