Revenue Department Issues Fresh Tax Alert: 6 Transactions That Can Trigger I-T Notices in 2025

Key Highlights:

Revenue Department officials have issued a new compliance alert for taxpayers in 2025, identifying six high-value transactions that may prompt Income Tax (I-T) Department notices. As part of a broader move to curb tax evasion and improve transparency, the department is using AI-powered analytics to flag anomalies in personal and business finances.

Here’s what you need to watch out for:

1. Cash Deposits in Savings Accounts Over ₹10 Lakh

If you deposit more than ₹10 lakh in cash into savings accounts in a single financial year, it could attract the attention of the I-T Department. The transaction is automatically reported by banks under the Statement of Financial Transactions (SFT) framework.

2. Cash Deposits in Current Accounts Above ₹50 Lakh

For businesses operating current accounts, deposits exceeding ₹50 lakh in a financial year raise red flags. The Revenue Department cross-checks this data against business filings and income declarations.

3. Credit Card Payments Exceeding Limits

Two credit card-related thresholds are under strict surveillance:

• 💳 Cash payment of ₹1 lakh or more toward a credit card bill
• 💳 Total annual credit card bill payments exceeding ₹10 lakh

These payments are flagged to ensure they align with your declared income.

4. Property Deals Above ₹30 Lakh

Buying or selling immovable property worth ₹30 lakh or more must be reported by the registrar. The I-T Department verifies whether the parties involved have declared adequate income to justify such transactions.

5. Cash Investments in Financial Instruments Over ₹10 Lakh

Investing over ₹10 lakh in cash in mutual funds, fixed deposits, or bonds within a year will trigger an alert if not backed by sufficient disclosed income.

6. Foreign Currency Transactions Over ₹10 Lakh

Purchasing foreign currency, including travel cards or international remittances worth ₹10 lakh or more, is monitored under FEMA and I-T regulations. If your income tax returns don’t support such spending, expect scrutiny.

How the Revenue Department Tracks These Transactions

All these transactions are automatically reported via the:

• Annual Information Statement (AIS)
• Form 26AS
• SFT Reports from banks, registrars, mutual fund houses, and authorized forex dealers

The Revenue Department’s AI-based systems cross-match these transactions with Income Tax Returns (ITRs). Any discrepancy triggers an alert and could lead to notices or further scrutiny.

What This Means for You

• 👨‍💼 Salaried and self-employed individuals must align high-value activities with their reported income
• 🏢 Business owners should maintain accurate current account entries and returns
• 💳 Credit card holders must track payment modes and amounts for audit trails
• 🌍 Frequent international travelers must ensure forex transactions match reported income

How to Take Action

To avoid receiving a notice from the I-T Department:

• ✅ Always file accurate and timely ITRs
• ✅ Match your AIS and Form 26AS with your financial activity
• ✅ Retain records and documentary proof of large transactions
• ✅ Respond promptly and truthfully to any communication from the tax department

Who Will Be Affected

• 🏦 High net-worth individuals and professionals
• 🛫 Frequent international travelers
• 🏢 Business owners with high current account turnover
• 📈 Investors in mutual funds and property
• 🧾 Credit card users with high payment thresholds

Revenue Department’s Tech-Driven Compliance Push Signals Tighter Tax Enforcement

This alert from the Revenue Department underscores the growing surveillance and digitization of India’s tax system. As high-value transactions are tracked automatically, it becomes crucial for individuals and businesses to maintain complete transparency.

Going forward, even unintentional mismatches can lead to an inquiry. With AI now embedded in the tax ecosystem, compliance is not optional—it’s essential.

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