New Delhi, Jan. 11 -- Tax sleuths are out to tighten the noose on cash transactions. Ahead of the union budget, Mint takes a look at some transactions that may result in hefty penalties by the Income Tax (IT) department, as the government seeks to discourage the flow of liquid money.

The IT Department and popular investment platforms, including banks and mutual funds have been discouraging cash transactions by tightening rules for layman.

The IT Department released a brochure on January 2, 2025, highlighting the importance of avoiding cash transactions to reduce the risk of tax penalties. "Say 'No' To Cash Transactions. Individuals often prefer to receive, pay, and transfer cash when the transactional value is marginal or small," the IT...