Large or frequent bank deposits can flag mismatches in income profiles: Expert flags what can trigger tax scrutiny

Everyday banking activities—from receiving salaries to paying utility bills—may seem routine for millions of Indians. But these familiar transactions are now drawing unprecedented attention from the Income Tax Department, which has expanded its data-monitoring systems to track even moderate-level financial activity. What was once a compliance burden primarily for high-net-worth individuals and large businesses has now shifted to include ordinary savings account holders, thanks to tighter scrutiny under the Statement of Financial Transactions (SFT) framework. Advertisement

The SFT is a reporting mechanism that mandates banks, post offices, mutual funds, fintechs, NBFCs, and other institutions to submit details of high-value transactions to the tax department every year by May 31. The obje