Income Tax Notice: Most of the people in our country prefer to transact in cash only. But transactions in cash can be done only up to a limit. The government has also made rules for this and if you ignore them, you can face a penalty of up to 137%.
Cash limit at home?
– There is no limit for keeping cash in the house
– It is necessary to tell the source of the cash kept in the house
– There can be problems if you do not tell the source
– Penalty up to 137% is possible if caught
Cash deposit limit in bank?
– There is no limit to deposit cash in the bank
– Rules are regarding giving information about the amount deposited
– Some rules have been fixed regarding savings account
– Deposited Rs 2 lakh or more at one go
– Rs 10 lakh in a year Deposited or more
– in this case the name will go in the Annual Information Report
– for current account this limit is Rs 50 lakh
Tax on withdrawing cash from bank?
– No tax at present on cash withdrawal from bank accounts
– In this budget announcement was made regarding tax on cash withdrawal
– 2% TDS will be deducted on cash withdrawal above Rs 1 crore
– 2% TDS will be deducted by bank or post office on withdrawal
Get cash on selling property?
– There is a limit on cash withdrawal on selling the property
– You can only transact in cash up to Rs.20,000
– 100% penalty for taking more than Rs.20,000 in cash
– You can transact through check
Cash payment limit?
– The limit of payment in cash is also pre-fixed
– Rules fixed for personal expenses-business expenses
– Cash payment up to Rs 2 lakh for personal expenses
– Possible to give cash up to Rs 10,000 for business
PAN on deposits above Rs 50,000?
– Depositing more than Rs 50,000 in cash in savings account
– In this case you need to give PAN card number
– Making pay order or demand draft in cash
– In case of pay order-DD also PAN number has to be given
Cash spent on marriage
– There is no limit on spending cash in marriage
– There are rules regarding the use of cash in marriage
– Purchase of more than 2 lakh rupees from one person
– In this case your name will go to IT
– Department can ask the source if needed
– Failure to disclose will attract 78% tax and interest
Cash gift in marriage
– Gift received on marriage is not taxed
– Whether the gift is given by a relative or received from somewhere else
– Rule is fixed in section 56 of the Income Tax Act
– Problem on gift more than Rs 2 lakh in
cash penalty possible
Can I gift in cash?
– You can give gifts in cash up to the limit
– You can gift cash less than Rs.2 lakh
– 100% penalty on cash gifts above Rs.2 lakh
– Exemption of Rs.2 lakh only for
relatives Cash gift from someone other than
– cannot take gift more than 50,000 rupees in this case
– if taken more than 50,000 rupees then tax will have to be paid
Loan in cash-
– Bank sends the loan amount directly to the account
– If you are taking loan in cash, then take only up to Rs.20,000
– 100% penalty if you take cash loan more than Rs.20,000
Donation in cash-
If you are donating in cash, then give only up to Rs 2000.
If you donate more than Rs 2000 in cash, there is no exemption under 80G
. Tax exemption is available on donations under 80G in IT.
Can I buy medical insurance in cash?
– Tax exemption is available on taking medical insurance policy
– Tax exemption of Rs 25,000 is available under section 80D
– Tax exemption of Rs 50,000 is available for senior citizens
– You paid cash for medical insurance
– You do not get this tax exemption under 80D will get
Notice from IT department-
– You have received a notice regarding cash deposit
– Income Tax Department has sent a notice on cash transaction
– Give your and family’s cash flow statement
– Reply giving the exact source of cash
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