Red flags of bank Deposits that can invite Income Tax Notice

Red flags of bank Deposits that can invite Income Tax Notice

If you put a large amount of money, like Rs. 15 lakh, into your savings account, the bank reports it to the Income Tax Department because it’s above a certain limit (usually Rs. 10 lakh in a year).

Taxpayer can invite a notice from the income tax department if they make large or unexplained cash deposits. If the department issues a notice under Section 68, you will need to provide proper documentation like business records, gift deeds or sale proofs to explain the source of the funds.

If you deposit more than Rs. 50,000 in cash in one day in your bank, you must give your PAN number.

If you deposit Rs. 10 lakh or more in your account (in cash or otherwise), the Income Tax Department may ask where the money came from (through notices under certain sections like 148 or 133(6)).

As per Section 269ST, you can’t receive Rs. 2 lakh or more in cash from a person in a single day, for a single transaction, or for one event. Payments above this must be made by bank transfer, cheque, or other non-cash methods.