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💼 Income Tax & Cash Deposits: What You Need to Know?

💼 Income Tax & Cash Deposits: What You Need to Know?


🤔 Q1: Why does the Income Tax Department keep an eye on cash deposits?

A: To put it simply, cash tells a story — and the Income Tax Department wants to hear it.
They monitor cash deposits to:

  • Track unaccounted income
  • Prevent tax evasion
  • Detect illegal financial activity

🧠 Example: If Mr. A deposits ₹15 lakh in cash but shows ₹4 lakh as his annual income, that’s a red flag!

💸 Q2: What are “high-value transactions” and why do they matter?

A: High-value transactions are those that exceed certain thresholds and could trigger an income tax notice if not reported properly.

✅ Key Insight: It’s not about what you earn, but how you spend it that gets noticed.

🧾 Q3: What is Form 61A and why should I care?

A: Think of Form 61A as the Income Tax Department’s radar. It tracks Specified Financial Transactions (SFTs) made by individuals or businesses.

It's filed under Section 285BA and helps ensure transparency and accountability.

🧠 Quick Tip: If you’re not filing it, don’t worry — your bank, property registrar, or credit card company will do it on your behalf. But if your transactions raise eyebrows, you'll hear from the ITD.

📊 Q4: What type of transactions get reported in Form 61A?

Here’s a quick cheat sheet:

Transaction Type

Threshold

Cash deposit in FD

₹10,00,000

Cash deposit/withdrawal in Savings A/c

₹10,00,000

Cash deposit/withdrawal in Current A/c

₹50,00,000

Property purchase/sale

₹30,00,000

Mutual funds, shares, bonds in cash

₹10,00,000

Credit card bill (cash payment)

₹1,00,000

Credit card bill (any mode)

₹10,00,000

Foreign currency exchange

₹10,00,000

Bank drafts/prepaid instruments

₹10,00,000

💡 Example: Swati paid ₹2 lakh in cash to buy mutual funds. Her AMC is legally bound to report this.

🗓️ Q5: When should Form 61A be filed?

A: The deadline is May 31st after the end of the financial year.

  • If missed: You get a 30-day warning
  • After that: ₹500 per day penalty applies!

🛑 Q6: What if someone files incorrect info in Form 61A?

A: Honest mistake? You have 10 days to fix it on your own.

If the Income Tax Department catches it:

  • They issue a notice
  • You get 30 days to fix it
  • Max penalty: ₹50,000

🤝 Note: In genuine cases, you may get an extension.

📬 Q7: What is a Section 245 notice, and what happens if you ignore it?

A: Section 245 lets the department adjust your refund against outstanding tax dues.

⚠️ If you don’t respond in 30 days:
They’ll auto-adjust your refund, and in some cases, initiate penalties.

📝 Q8: Made a mistake in your ITR? Can you revise it?

A: Yes — but only if you filed the original return before the deadline.

  • You can revise and e-verify within 30 days
  • Post-deadline returns? ❌ Not eligible for revision.

📌 Example: Ravi filed his ITR on July 15 but forgot to include his FD interest. He can revise it until Dec 31 (or the timeline set for that assessment year).

✅ Key Takeaways

🔹 Stay below the radar — Report transactions honestly
🔹 Keep an eye on thresholds — especially when dealing with cash
🔹 Form 61A is not for individuals to file, but your activity may still be reported
🔹 Always respond to tax notices — ignorance is costly
🔹 Revisions are your friend — use them wisely!

📞 Need help decoding your financials or dealing with a tax notice?
CA Bhavesh Panpaliya – 8888755557 is just a call away.

 Honest mistake? You have 10 days to fix it on your own.
If the Income Tax Department catches it:
• They issue a notice
• You get 30 days to fix it
• Max penalty: ₹50,000
🤝 Note: In genuine cases, you may get an extension.
📬 Q7: What is a Section 245 notice, and what happens if you ignore it?
A: Section 245 lets the department adjust your refund against outstanding tax dues.
⚠️ If you don’t respond in 30 days:
They’ll auto-adjust your refund, and in some cases, initiate penalties.
📝 Q8: Made a mistake in your ITR? Can you revise it?
A: Yes — but only if you filed the original return before the deadline.
• You can revise and e-verify within 30 days
• Post-deadline returns? ❌ Not eligible for revision.
📌 Example: Ravi filed his ITR on July 15 but forgot to include his FD interest. He can revise it until Dec 31 (or the timeline set for that assessment year).
✅ Key Takeaways
🔹 Stay below the radar — Report transactions honestly
🔹 Keep an eye on thresholds — especially when dealing with cash
🔹 Form 61A is not for individuals to file, but your activity may still be reported
🔹 Always respond to tax notices — ignorance is costly
🔹 Revisions are your friend — use them wisely!
📞 Need help decoding your financials or dealing with a tax notice?
CA Bhavesh Panpaliya – 8888755557 is just a call away.

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