New Delhi, May 2 -- In the last few years, the Income Tax Department and various investment platforms, such as banks, mutual fund houses, and broker platforms, have been discouraging cash transactions by tightening their rules for the public at large. Nowadays, these institutions allow cash transactions up to a certain limit, and in the event of a minor violation, the Income Tax Department may issue a notice to the violator.

So, home loan borrowers planning to prepay their home loan principal using their bank savings and available cash need to know some cash transaction rules to avoid an income tax notice.

According to tax and investment experts, under Section 269ST of the Income Tax Act, home loan borrowers can deposit less than Rs.50,...