A grain trader named Mr Kumar from Rampur made a large cash deposit of Rs 5.2 crore in his bank account and filed an Income Tax Return (ITR) declaring only Rs 7.65 lakh income. This raised many red flags in the income tax department.
The first red flag was raised when Allahabad Bank reported the deposit through its specified financial transaction (SFT) return. Banks in India have to file a list of SFT returns detailing all cash deposits and withdrawals above a specified limit. In Kumar’s case, the Rs 5.2 crore cash deposit triggered this report.
