The Income Tax Department keeps a strict watch on high-value financial transactions. If you make large cash deposits, high-value purchases, or excessive credit card payments, you could receive a tax notice, and even a Chartered Accountant (CA) may not be able to help.

Here are 7 financial transactions that can trigger an Income Tax Department notice:

1️⃣ Spending Over ₹2 Lakh on Foreign Travel

If you spend more than ₹2 lakh on international travel in a year, the Income Tax Department gets notified automatically.

2️⃣ Spending More Than ₹2 Lakh on Credit Cards

Excessive spending via credit cards (above ₹2 lakh annually) can raise red flags. If you can spend that much, the tax department assumes you must declare a matching income.

3️⃣ Paying Credit Card Bills in Cash (Above ₹1 Lakh)

If you pay ₹1 lakh or more in cash for your credit card bill, the IT department may investigate the source of funds. Suspicious cash payments can even lead to penalties.

4️⃣ Investing Over ₹10 Lakh in Stocks, Mutual Funds, or Bonds

Any investment exceeding ₹10 lakh in shares, mutual funds, or bonds in a financial year is tracked by the tax department, and a notice could be issued.

5️⃣ Buying Property Worth ₹30 Lakh or More

Property transactions over ₹30 lakh are directly reported to the Income Tax Department. If your declared income doesn’t justify the purchase, expect a scrutiny notice.

6️⃣ Depositing Over ₹10 Lakh in Cash in Your Bank Account

If you deposit ₹10 lakh or more in cash into your savings or current account, the bank must report it to the Income Tax Department. If you can’t explain the source, a notice will follow.

7️⃣ High-Value Cash Transactions in Business (Above ₹50,000)

If you run a business and make cash transactions over ₹50,000, the IT department might ask for detailed financial records to ensure compliance.

How to Avoid Income Tax Notices?

✅ Report all high-value transactions in your Income Tax Return (ITR).
✅ Use digital transactions instead of large cash deposits.
✅ Keep records of foreign travel, credit card statements, and property purchases.
✅ Avoid suspicious cash transactions, especially in real estate or business.

Ignoring these rules can lead to heavy penalties and legal trouble. Stay compliant and avoid unnecessary tax scrutiny!