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 of yours. Evidence will be sought in support of every answer of yours.
If evidence is not found, then the legal noose will tighten
If you get stuck or stray anywhere 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 it a gift? Along with the evidence to find answers to all these questions, you will also have to provide proof that whatever cash has been deposited in your account, you have shown it in your income tax return or are going to show it. 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 get into trouble even if you deposit more than two lakhs in one go
It is not that after the cash keeps getting deposited in your account for a year, when its limit exceeds 10 lakhs, then the income tax department will question you. Rather, even 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 kind of 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.