The income tax department of India is highly vigilant against high value cash transactions. They have developed such a unique system that even when we don’t report about our cash transaction, they would fish out the transaction details from the balance sheet of the institution with which we have done the cash transaction. For example, suppose we made bank demand draft using cash and deposited that in our mutual fund scheme, then the income tax officials will get this information by mutual fund house balance sheet. So, it’s advisable to know one’s cash transaction limit allowed while investing in mutual funds or any other investment scheme.
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