Cash Deposit Limit: In this era of inflation, it has become necessary to save along with earning. Most people have a savings account in some bank or the other. People use savings accounts to deposit cash and sometimes withdraw large amounts at once. But do you know that there are some rules related to this and if you do not follow them then you may have to pay penalty. Today we will tell you about those rules.
Know the rules before depositing money in savings account
As per income tax rules, there is a limit for depositing cash in a savings account. You can deposit cash up to a maximum of Rs 1 lakh in a day. According to a Forbes report, if you deposit Rs 10 lakh or more in a financial year, the IT department will have to be informed. But if you have a current account, the limit is Rs 50 lakh.
According to the report, it is the rule for financial institutions to report transactions above these limits to the Income Tax Department.
The Income Tax Department has set this limit to keep an eye on savings accounts, current accounts and cash transactions of financial institutions, so that money laundering, tax evasion and other illegal financial activities can be prevented.
The limits for cash deposits in bank accounts are as follows:
- Any person can deposit a maximum of Rs 10 lakh in his account in a financial year. This limit is for taxpayers having one or more accounts.
- If a person deposits more than Rs 10 lakh in cash in a financial year, the bank will have to report it to the Income Tax Department.
- You can deposit cash up to Rs 1 lakh in a day. If you do not deposit cash in your account regularly, this limit can go up to Rs 2.50 lakh.
- If you deposit Rs 50,000 or more in cash in the bank, you will also have to provide PAN number.
- The cash deposit limit for current accounts is Rs 50 lakh.
- Current accounts maintained for large distributors, manufacturers and service providers have a monthly cash deposit limit of ₹1 to ₹2 crore.
Know what is Section 194A
If you withdraw more than Rs 1 crore from your savings account in a financial year, then 2 percent TDS will be deducted on it. Those who have not filed ITR for the last three years, 2 percent TDS will be deducted, that too only on withdrawals of more than Rs 20 lakh and if such people have withdrawn Rs 1 crore in a financial year, then 5 percent will be deducted. TDS will be charged.
Section 269ST
Under Section 269ST of the Income Tax Act, if a person deposits cash of Rs 2 lakh or more in his account in a particular financial year, then he will be fined. However, this penalty is not imposed on withdrawing money from the bank. Let us tell you that TDS deduction is applicable on withdrawals exceeding a certain limit.
