Income Tax can query cash deposits below ₹10 lakh

Rule 114E requires banks to report cash deposits of ₹10 lakh or more in savings accounts via Statement of Financial Transactions (SFT), but this is only a reporting threshold for banks.

The Income Tax Department can seek information on cash deposits below ₹10 lakh under various provisions of the Income-tax Act, such as Sections 142(1), 143(2), 148, and 133(6).

Taxpayers' financial data, including deposits below the threshold, appears in their Annual Information Statement (AIS) and Form 26AS from multiple reporting entities.

Deposits below ₹10 lakh may trigger a notice if the Assessing Officer finds a mismatch or requires examination based on the taxpayer's return or other information.