Traveling abroad? Buying dollar beyond this limit may attract income tax notice
Income tax department has become highly vigilant against the cash transactions executed by taxpayers. It has evolved such an effective system in which, if a taxpayer executes any such cash transaction, then it will get reported to the department much before the taxpayer reports such transaction. This system is effective even when you are traveling abroad. According to tax investment experts, while traveling abroad, cash transaction to buy US dollar or any other foreign currency is allowed, but going beyond a certain limit will get reported to the income tax department by the money changer. This cash transaction for buying foreign currency may attract income tax notice, if there is huge gap between the income tax return (ITR) of the taxpayer the cash used for buying foreign currency.
Speaking on the limit beyond which cash transaction for buying dollar or any other foreign currency while traveling abroad Balwant Jain, a Mumbai-based tax investment expert said, “While traveling abroad, one can buy US dollar (USD) or any other foreign currency through cash transaction. But, going beyond ₹10 lakh limit will be reported by the money changer to the income tax department of India. If that cash used for buying overseas tender is not in sync with the travelers’ income tax return (ITR) for that financial year, then in that case, the income tax department may send notice to the traveler.”
On what a taxpayer should do after receiving the income tax notice, SEBI registered tax investment expert Jitendra Solanki said, “Income tax department slapping notice should be taken as a query by taxpayers. After receiving the notice, the taxpayer is advised to go to the income tax department website reply to the income tax notice by logging in at one’s Form 26AS.”
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