Cash Deposit Rs. 10 Lakhs in Daughter Account

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(Querist)
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16 October 2025 Can I deposit Rs. 10 Lakhs in cash into my daughter's account, and then she can transfer it back to my account?

Does it violate any rules?
Is it attracting any notice or issues from the Income Tax or any other legal issues?

Kindly advise

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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16 October 2025 If your daughter simply deposits and then immediately transfers back the money to your account, this could be interpreted as trying to evade tax norms or funnel funds, which may lead to further questions and potentially severe penalties if the source cannot be justified.

Any attempt to “circular transfer” (deposit in one account, immediate outward transfer) without a bona fide transaction could be seen as suspicious activity and may attract the attention of tax authorities and, in severe cases, trigger anti-money laundering provisions.

Even if you do not exceed Rs. 10 lakh in a single deposit but reach this sum cumulatively over the year, it will trigger bank reporting and potential scrutiny.

Depositing Rs. 10 lakh in cash into your daughter's account and having her transfer it back to you is not advisable. It will be reported to tax authorities, will likely attract scrutiny, and may result in penalties or legal issues if you cannot justify the transaction with genuine documentation or a legitimate source.

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