How much cash can you deposit in a bank account? Know these important rules or else you may be fined

Most people have a savings account in some bank or the other. A savings account means a savings account and many people use it to deposit cash and sometimes to withdraw large amounts at once. But do you know that there are some rules related to it and if you do not follow them, you may have to pay a penalty? Today we will tell you about those rules.

Rules for deposit in savings account

According to the Income Tax rules, there is a limit on cash deposits in a savings account. You can deposit up to Rs 1 lakh in cash in a day. According to a Forbes report, if you deposit Rs 10 lakh or more in a financial year, then the IT department has to be informed. But if you have a current account then this limit is Rs 50 lakh. According to the report, it is a rule for financial institutions to report transactions above these limits to the Income Tax Department.

The Income Tax Department has made this limit to keep an eye on the cash transactions of savings accounts current accounts and financial institutions so that money laundering, tax evasion, and other illegal financial activities can be prevented.

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 from it. For those who have not filed ITR for the last three years, 2 percent TDS will be deducted from them, that too only on withdrawals of more than Rs 20 lakh, and if such people have withdrawn Rs 1 crore in a financial year, then 5 percent TDS will be levied on them.

Section 269ST

Under Section 269ST of the Income Tax Act, if a person deposits Rs 2 lakh or more in cash in a particular financial year, then a penalty will be imposed on it. However, this penalty is not imposed on withdrawing money from the bank. Let us tell you that a TDS deduction is applicable on withdrawals above a specific limit.