RBI Cash Deposit Rules: Bank account has become a necessity for everyone these days. Most people in India keep a savings account in the bank because the money kept in the bank is considered more secure.
Whether a person is employed, a student or a businessman, they have one or more savings accounts. Depositing cash in savings accounts (Savings Accounts Cash Deposit Limit) is very common, especially for those who deal in cash.
How much cash is right to keep in a savings account?
But do you know how much cash is safe to deposit in these accounts? Most people keep depositing money on a daily basis, but are unaware of some important rules of RBI and Income Tax. It is possible that they unknowingly deposit such cash which may lead to an Income Tax notice.
Do you know the limit of keeping cash in a savings account?
Let us tell you that frequent deposits or large cash amounts can attract the attention of the Income Tax Department. By knowing the RBI’s fixed limit and the related tax rules, you can avoid investigation or penalty. So, let us tell you those important rules related to savings account which are very important for you to know.
Savings account limit
The Reserve Bank of India (RBI) and the Income Tax Department keep an eye on high value transactions. If you deposit more than Rs 10 lakh in your savings account in a financial year, your bank is required to report it to the tax authorities under the Annual Information Return (AIR). Let us tell you that this does not mean that you will be taxed for this, but if the transaction is more than your declared income, then it may come under investigation.
Current Account Limit?
Let us tell you that the limit for depositing cash in a current account is higher. You can deposit up to Rs 50 lakh in a current account in a financial year.
For which transactions is PAN required?
If a person deposits cash of Rs 50,000 or more in a single transaction, then a PAN number (permanent account number) is required. Even if the amount deposited each time is less than Rs 50,000, if the transaction amount exceeds the fixed limit of one year, then it may come under the radar of the tax department, especially if the amount is more than the declared income.
What happens if the limit is exceeded?
If you deposit a large amount of cash without any legitimate source, the income department may question you under sections 131, 142(1) or 148. If you are unable to give a satisfactory answer about where the money came from, the amount can be treated as unexplained income and taxed at a flat rate of 60% under section 68, along with surcharge and cess.
Cash deposits and your Form 26AS or AIS
All high value transactions reported by your bank are reflected in your Form 26AS or the new AIS (Annual Information Statement). Tax officials use these records to match your filed income tax returns. If there is a mismatch, you may be sent a notice.
Related Articles:-
CGHS rules Change: New CGHS guidelines for central government employees, You must know
IMD High Alert! IMD issues alert of heavy rain, lightning in these states for next five days
