Bank Account: The day more than 10 lakh cash is deposited in your savings account in a year, you will receive a notice from the Income Tax Department. Evidence will be sought in support of every answer of yours.
Cash flow: Is there any excess cash being deposited in your savings account? If you do not take care of this, then you may get into a big problem. The day more than 10 lakh cash is deposited in your savings account in a year, you will get into legal trouble. You will get a notice from the Income Tax Department. Then a series of questions will start on every answer you give. Evidence will be sought in support of every answer.
If evidence is not found, the legal noose will tighten
If you get stuck or confused in answering or are unable to submit evidence, then the noose of law will tighten against you. Your bank accounts can be frozen and you can also go to jail. Therefore, you should keep evidence every time cash is deposited in your account. Those evidences must contain the answers as to who has deposited cash in your account? Why did he deposit cash in your account? Has he deposited this amount for any business or any service provided by you. Or has he repaid any loan taken from you. Is it possible that he has donated for the ceremony in your personal account or is that amount a gift? Along with providing the evidence to answer all these questions, you will also have to provide proof that whatever cash has been deposited in your account, you have shown it or are going to show it in your income tax return. If this is not the case then you will also have to prove that the amount deposited in your account is not taxable income at all.
You will be trapped even if you deposit more than two lakh rupees in one go
It is not that after a year of depositing cash in your account, when the limit exceeds 10 lakhs, the Income Tax Department will question you. Rather, if more than two lakh rupees are deposited in your account by a single person in a single day, then also you may have to face embarrassment. For this also, you will have to answer the same questions as you have to answer if more than 10 lakh rupees are deposited in a year. The same kind of notice will also be served to you by the Income Tax Department.
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