If you’re making large transactions without being mindful of the rules, you could be putting yourself at risk. The income tax department monitors all your financial activities, and if they spot any irregularities, you might receive a notice. To steer clear of any income tax issues, avoid these 7 types of transactions, as even a chartered accountant won’t be able to help you if you get caught. Pay special attention to things like cash deposits, significant spending on international travel, and credit card payments. Here’s a rundown of transactions that could land you in hot water.
Spending over 2 lakh on foreign travel
If you rack up more than Rs 2 lakh on foreign trips in a year, that info gets reported to the Income Tax Department.
Credit card expenses: Spending over Rs 2 lakh a year on your credit card will also catch the attention of the Income Tax Department. Big transactions can raise some eyebrows.
Paying credit card bills in cash
If you pay your credit card bill in cash and it’s Rs 1 lakh or more, the Income Tax Department can investigate that transaction. If it seems suspicious or linked to black money, you could receive an income tax notice, along with potential fines.
Large investments in stocks and mutual funds: Investing over Rs 10 lakh in mutual funds, stocks, or bonds in a year can trigger a notice from the Income Tax Department.
Property purchases over Rs 30 lakh
Buying property priced at Rs 30 lakh or more automatically gets flagged to the Income Tax Department. If you deposit a large cash amount into your bank account, especially over Rs 10 lakh, you increase your chances of getting noticed. The department is particularly vigilant about cash transactions in business, and they may request information regarding those activities.