Managing your finances responsibly is crucial, especially when it comes to high-value transactions. The Income Tax Department in India closely monitors certain financial activities to ensure compliance with tax laws. Engaging in specific transactions without proper documentation or justification can lead to scrutiny and potential notices from tax authorities. Here are seven transactions that could attract the attention of the Income Tax Department: 

1. Spending Over ₹2 Lakh on Foreign Travel

If you spend more than ₹2 lakh in a financial year on foreign travel, this information is reported to the Income Tax Department. Such expenses should align with your declared income to avoid raising red flags.

2. Annual Credit Card Spending Exceeding ₹2 Lakh

High credit card expenditures, especially those surpassing ₹2 lakh annually, are monitored. Ensure that your spending habits are consistent with your reported income to prevent potential inquiries.

3. Paying Credit Card Bills in Cash Over ₹1 Lakh

Settling credit card dues with cash payments exceeding ₹1 lakh can raise suspicion. The tax authorities may question the source of such funds, especially if they are not reflected in your income declarations.

4. Investing More Than ₹10 Lakh in Mutual Funds or Stocks

Investments exceeding ₹10 lakh in mutual funds, stocks, or bonds are reported to the tax department. It's essential to have a clear and documented source of funds for such investments to avoid scrutiny.

5. Purchasing Property Worth Over ₹30 Lakh

Buying property valued above ₹30 lakh is automatically reported to the Income Tax Department. Ensure that your income and financial records justify such purchases to prevent potential tax notices.

6. Depositing Over ₹10 Lakh in Cash into Bank Accounts

Cash deposits exceeding ₹10 lakh in a financial year are flagged and reported. Such large deposits should be backed by legitimate income sources and proper documentation.

7. Large Cash Transactions in Business

For businesses, cash transactions above ₹50,000 can attract attention. Maintaining proper records and using banking channels for significant transactions can help in staying compliant.

Final Thoughts

Being aware of these financial thresholds and ensuring that your transactions are transparent and well-documented can help you stay on the right side of tax laws. Regularly reviewing your financial activities and consulting with tax professionals can further safeguard against unintended compliance issues.