We all use saving account to keep money and withdraw if needed, right? This is part of our daily banking. But do you know that depositing too much cash in your own savings account can put you in trouble? Yes, the Income Tax Department is eyeing such transactions.
If you deposit more cash than a fixed limit, then the Income Tax Department can send you a notice and ask, brother, where did this money come from? And if you are not able to give the correct answer, then the matter can be serious, even going to jail can come.
How much cash is rang when deposited the alarm bell? (Financial Year Limit)
Simply put, if you have a financial year (ie between 1 April to 31 March) 10 lakh rupees or more cash mixed with one or more savings accounts If you deposit, the bank gives information to the Income Tax Department. After this, the department can ask you about the source of this money. You have to tell that this money is your earnings, got it from somewhere, or what is its source and if tax is made or not. If you are unable to give a satisfactory answer, then there may be a problem. If needed, it is better to seek the advice of a tax expert.
Is there a risk on depositing more cash in a day? (Daily Limit)
Yes, it is also important to take care. If you in your savings account in a single day Cash over 1 lakh rupees Cutting, even then the Income Tax Department can be seen. This rule is different from a year -long limit. Therefore, big cash deposits should also be avoided in daily transactions.
Why did the Income Tax Department bring this rule?
Now you must be wondering why the Income Tax Department does this? Actually, these rules are made to stop tax evasion and curb black money. The department believes that often people deposit a large amount of cash only when they want to hide the real source of money or are avoiding paying tax on it. That is why complete information is taken in such cases.
What could not happen if the answer is not given correct? (action potential)
If the notice of the Income Tax Department comes and you are unable to answer it properly at the right time, or you have no sure evidence of the source of cash deposited, then the matter can deteriorate. Department your Freeze to bank account (That is, you will not be able to withdraw money from it) and in serious cases can also be punished or fined under legal action.
How to stay safe? Keep these things in mind:
It is not a matter of concern, a little caution can save you from any trouble:
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Keep the evidence: Whenever you deposit a large amount (especially in cash), keep proof of what is its source. This can be your salary slip, business receipt, document of a property sale, gift deed, or loan agreement.
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Give correct information: If your deposited amount is part of your taxable income (income which is taxed), then show it honestly in your income tax return (ITR).
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Avoid big cash deposits: Try not to deposit a huge amount in cash at once or in a single day. If more money is to be deposited, divide it into small parts or use online methods (eg NEFT, RTGS, IMPS, UPI). It is more secure and easy to track.
So, next time you go to deposit cash in the bank, take care of these limits and rules. A little awareness can save you from many future problems!
