What will happen if someone transfer more than Rs 10 lakh in cash? Know income tax rules to avoid trouble

Income Tax Rule : Have you ever considered the amount of money you can put into or take out from your bank savings account in a fiscal year to evade examination by income tax officials? Personal finance specialists state that as per income tax regulations, the aggregate cash deposit or withdrawal in a savings account within a financial year (April 1 to March 31) must not surpass ₹ 10 lakh. Accepting ₹ 2 lakh or more in cash from a person in a single day, whether through one transaction or multiple transactions for a single event or occasion, violates the regulations.

What will happen if someone transfer more than Rs 10 lakh?

If you transfer over ₹ 10 lakh in cash into all your savings accounts, the bank will notify the Income Tax Department. This data will be provided regardless of whether the transactions are distributed among various accounts.

Abhishek Soni, the CEO and co-founder of Tax2win, stated, “Receiving a cash deposit exceeding ₹ 10 lakh in your savings account during a financial year is regarded as a high-value transaction.” The financial institution or bank must notify the Income Tax Department, as required by Section 114B of the Income Tax Act, 1962. You must present your PAN number if you deposit over ₹ 50,000 in one day. In the absence of a PAN, you will need to submit Form 60/61.

How to react after getting an income tax notice?

If you get an income tax notice related to a large cash transaction, you must provide adequate documentation to verify the origin of your funds. Bank statements, investment documents, and inheritance papers are examples of the paperwork that must be provided. If you’re uncertain or worried about disclosing the origin of cash, seek advice from a knowledgeable tax professional.