Kolkata: It is well known that the government of India does not encourage ash transactions. However, it is not easy to dispense with cash and millions of millions of people continue to transact in cash. However, one of the obstacles that the government has erected on the path of cash transaction is to limit the use of cash is various transactions. It is significant that one keeps in mind the transactions where one should not try to use a lot of cash.
Experts point to a lot of transactions which are under constant watch by the income tax personnel and if these norms are breached, the taxman can come knocking at your door, which is not a pleasant experience for anyone. Let’s have a look at what are these transactions and what are the limits that one need to adhere to.
Banks, AMCs etc asked to report high-value transactions
Income Tax department officials monitor high-value transactions through a statement of financial transaction (SFT). The government has mandated bodies such as banks, post offices, cooperative societies, credit card issuers, mutual fund houses etc to furnish information about high-value transactions that were registered during a fiscal year by May 31 of the following fiscal year. With the help of this SFT the Income Tax Department can track an individual’s financial activities. SFT full form is a Statement of Financial Transactions.
Which transactions are always under watch
The following is a list of transactions over which the Income Tax Department keeps a hawkeye.
Cash payment for purchasing bank draft, pay order, banker’s cheque etc
Cash deposits in a savings bank account
Cash deposit or withdrawal from a current account
Sale or purchase of an immovable property
Investments in shares, mutual funds, debentures and bonds in cash
Payment of credit card bill in cash
Sale of foreign currency
Crediting FOREX card
Spending in foreign currency through a debit or a credit card or through traveler’s cheque etc
Cash deposits in the fixed deposit or recurring deposit account
In its untiring efforts to weed out the use of cash in the economy, Income Tax Department keeps a hawkeye on several transactions that individuals often indulge in. If the amount is disproportionate to your reported sources of income, the taxman can come calling. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
