- Heavy Spending on Foreign Travel: If you spend more than ₹2 lakh on foreign travel in a year, this information will automatically reach the Income Tax Department. So, if you plan a luxurious trip, be aware that it could raise a red flag.
- Investing in Property Above ₹30 Lakh: Buying a property worth ₹30 lakh or more is another transaction that will be reported to the Income Tax Department. If you make such a purchase, expect the department to take notice.
- Big cash deposit: Making a cash deposit of more than ₹10 lakh into a bank account can attract the attention of the Income Tax department.
- Business transactions of large amounts in cash: The Income tax department monitors business transactions done in cash, especially those over ₹50,000.
- Credit card bill payment in cash of more than ₹1 lakh: Paying credit card bills in cash for amounts exceeding ₹1 lakh may attract tax scrutiny.
- Large credit card purchases: Any single spend on a credit card that is disproportionately high for your income can lead to an investigation.
These transactions, especially if they are linked to credit card payments, can make you a target for tax scrutiny. Even a Chartered Accountant (CA) may not be able to save you if these transactions come under their radar. It’s essential to ensure that all transactions are reported accurately in your income tax return (ITR) to avoid any discrepancies that could result in an income tax notice.
Disclaimer: The information provided here is for general guidance only and should not be considered legal or financial advice. For personalized advice, consult a qualified tax professional or Chartered Accountant.
