The Income Tax Department has intensified its surveillance on high-value cash transactions in 2025, leveraging AI-driven analytics and real-time reporting from banks and financial institutions. Taxpayers are advised to stay vigilant, as exceeding certain cash limits can lead to notices, audits, or penalties under the Income Tax Act.
Here are five types of cash transactions that can put you on the tax radar this year:
💰 1. Cash Deposits Over ₹10 Lakh in Bank Accounts
If your total cash deposits exceed ₹10 lakh in a financial year across savings or current accounts, banks are mandated to report it to the Income Tax Department. Even if split across multiple accounts or branches, the cumulative amount is monitored.
🏦 2. Fixed Deposits in Cash Above ₹10 Lakh
Making FDs worth ₹10 lakh or more in cash—even across different banks—can trigger scrutiny. Ensure you maintain documented proof of income to justify the source of funds.
🏠 3. Real Estate Deals Involving Cash Over ₹30 Lakh
Any property transaction involving ₹30 lakh or more in cash must be reported by the registrar. Attempting to bypass registration fees or taxes through cash payments can lead to inquiries and legal action.
💳 4. Credit Card Bill Payments in Cash Over ₹1 Lakh
Paying credit card bills exceeding ₹1 lakh in cash at once—or total annual payments over ₹10 lakh (via any mode)—must be reported by banks. Ensure your income and tax filings align with your spending habits.
📈 5. Cash Investments in Stocks, Mutual Funds, or Bonds Over ₹10 Lakh
Investing ₹10 lakh or more in cash in financial instruments like stocks, mutual funds, or debentures is flagged and reported. Always use official banking channels and declare investment income properly.
⚠️ Stay Compliant, Stay Safe
The Central Board of Direct Taxes (CBDT) has issued clear guidelines to curb tax evasion and promote transparency. Taxpayers are urged to maintain accurate records, file returns on time, and avoid large cash dealings unless absolutely necessary.
Stay tuned for more updates on tax compliance and financial regulations.
