The Income Tax Department in India uses an advanced reporting system known as the Statement of Financial Transactions (SFT) to track several high-value financial activities. These transactions help the department identify unreported income, detect suspicious money movement, and ensure tax compliance. If you frequently make significant deposits, payments, or investments, understanding these limits can protect you from unnecessary scrutiny.
इस आर्टिकल को हिंदी में पढ़ने के लिए यहां क्लिक करेंWhy Understanding These Limits Matters
Every bank, NBFC, mutual fund company, and registrar is required to report certain transactions above a defined threshold. This happens automatically — you don’t need to submit anything separately.
While large transactions are not illegal, they must align with your reported income. For example, if your annual income is ₹7 lakh but your credit card payments exceed ₹12 lakh, the system flags this instantly. Such mismatches often lead to a notice seeking clarification.
Why Should You Know These Transaction Limits?
Banks and financial institutions report high-value transactions to the Income Tax Department under the Statement of Financial Transactions (SFT).
This does not mean every big transaction is wrong, but it must match the income reported in your ITR. If there is a mismatch, it may trigger a notice.
10 Major Transactions Under Surveillance
These transactions are carefully tracked because they involve large cash movement, investment flow, or asset purchases. Staying informed helps you avoid unnecessary complications.
High-Value Transactions List
| Nature of Transaction | Monitoring Limit |
|---|---|
| Cash deposit in savings account | ₹10 lakh+ |
| Cash deposit in current account | ₹50 lakh+ |
| Credit card bill payment in cash | ₹1 lakh+ |
| Total annual credit card bill payment | ₹10 lakh+ |
| Purchase or sale of immovable property | ₹30 lakh+ |
| Investment in fixed deposits | ₹10 lakh+ |
| Foreign travel or forex spending | ₹10 lakh+ |
| Investment in shares, bonds, mutual funds | ₹10 lakh+ |
| Cash gift received without documentation | ₹50,000+ |
| Cash received from one person in a single day | ₹2 lakh+ |
What Happens When a Transaction Gets Flagged?
If the system detects abnormal or mismatched financial behaviour, the taxpayer may receive:
- An e-verification message
- A compliance alert on the Income Tax portal
- A formal notice under sections 133(6) or 148
In most cases, the department simply asks for clarification. As long as the source of funds is legitimate and documented, the matter is closed without penalty.
How to Stay Safe and Avoid Tax Notices
✔ Maintain proper documentation for every major financial movement.
✔ File your ITR accurately and on time.
✔ Avoid accepting or giving cash beyond legal limits.
✔ Keep PAN updated across your bank accounts, investments, and property records.
✔ Consult a financial expert if your transactions are complex or high in volume.
These steps ensure your financial footprint remains clean and traceable.
Will Every High-Value Transaction Lead to a Notice?
No.
A notice is sent only when there is a mismatch or suspicious movement.
If your income supports the transaction and your documents are clear, you won’t face any trouble.
In fact, transparent financial behavior strengthens your long-term creditworthiness and financial reliability.
👤 Author — Abhishek Chouhan
Abhishek Chouhan is a finance and investment educator with over 10 years of experience in the financial markets.
Through MoneyBlasters, he aims to simplify complex financial topics and make them accessible for every reader.
📌 Disclaimer
This article is intended solely for educational purposes.
It should not be considered financial, tax, or investment advice.
Readers are encouraged to consult a certified financial advisor or tax consultant before taking any action.
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