Saving Account Rules: Before depositing cash in your savings account, you must know these rules of RBI..
Almost every citizen in our country has a savings account in the bank. Everyone has a bank account due to being a zero-balance account. Employees have salary accounts. Traders deposit large amounts of money in savings accounts. By linking it to UPI, we make transactions (Zero Balance Account) easy. We keep depositing and withdrawing money in that account. However many people do not know that there are some rules regarding these deposits and withdrawals. The income tax department has a close watch on those who deposit and withdraw large amounts. You should be aware of those rules so that you do not have any problems.
According to the rules of the Income Tax Department, cash deposits are prohibited. That is, we have to deposit cash only up to a certain amount. The Income Tax Department has imposed such a provision to prevent illegal financial activities like money laundering (bank account cash limit) and tax evasion. Let us now see complete information about it.
What is the deposit limit?
According to the rule, you can spend Rs. 10 lahks or more, you have to inform the IT department. If you have a current account, the limit is Rs. 50 lakh. This cash is not immediately taxable, but financial institutions must report transactions above this limit to the Income Tax Department. People who have not filed tax returns for the last three years will have to pay 2% TDS. This is also payable only on withdrawals above Rs. 20 lakh (saving account cash limit). These individuals who have Rs. 1 crore in a particular financial year will be charged 5% TDS.
Penalty on cash deposits
The TDS exempted under Section 194N of the Income Tax Act is not classified as income. But it can be used as a credit while filing income tax returns (ITR filing tips). As per Section 269ST of the Income Tax Act, a person who has Rs. 2 lakh or more in cash in a particular financial year (cash limit rules in bank) will be charged a penalty. This penalty is not applicable to withdrawing money from the bank. TDS deduction is applicable on withdrawals above a certain limit.
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