New Guidelines on Cash Deposits: What You Need to Know

Cash Deposits

New Guidelines on Cash Deposits: What You Need to Know

Cash Deposits

With the Income Tax Department’s latest guidelines, there are new rules regarding cash deposits into savings accounts that everyone should be aware of. Here’s a breakdown of what you need to know to avoid hefty taxes and ensure compliance.

Understanding Cash Deposit Limits

In today’s digital age, having a savings account is almost essential. It not only helps in managing day-to-day transactions but is also necessary to benefit from various government schemes. While there are no restrictions on the maximum balance you can hold in your savings account, there are specific rules concerning cash deposits and withdrawals that you need to be aware of.

Cash Deposit Limits Explained

  • Deposit Amounts and PAN Requirement: When depositing cash, if the amount is Rs 50,000 or more, you must provide your PAN number. This is to ensure that the source of the cash is traceable.

  • Daily and Annual Limits:

    • Daily Limit: You can deposit up to Rs 1 lakh in cash per day.
    • Non-Regular Deposits: If you don’t deposit cash regularly, this limit can go up to Rs 2.50 lakh.
    • Annual Limit: Over a financial year, you can deposit a maximum of Rs 10 lakh in cash across all accounts you hold. This is a cumulative limit for all your accounts.
Cash Deposits

Monitoring and Reporting

Deposits exceeding Rs 10 lakh in a financial year will attract the attention of the Income Tax Department. Banks are required to report such large deposits, which may prompt an investigation if the source of the funds is not satisfactorily explained.

Potential Consequences

If you cannot provide a satisfactory explanation for the source of the deposited funds, you might face severe tax implications:

    • Tax Rate: A substantial 60% tax may be levied on the amount.
    • Additional Charges: In addition to the tax, a 25% surcharge and 4% cess could be applied.

Best Practices for Managing Large Sums

Instead of keeping large amounts of cash in your savings account, consider alternative options:

  • Fixed Deposits (FDs): Convert large sums into FDs to earn better interest.
  • Investments: Explore investment opportunities that offer better returns than a savings account.

Read More: How to Respond to a Defective Return Notice under Section 139(9)

While you can hold any amount in your savings account, managing cash deposits wisely is crucial to avoid unnecessary tax liabilities. By adhering to the limits and keeping track of your deposits, you can ensure that your finances remain in good standing with the Income Tax Department.

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Major Financial Changes in July: What You Need to Know

Financial Changes

Major Financial Changes in July: What You Need to Know

Financial Changes

As we step into July, several significant financial changes are set to take place that could impact your finances. From the announcement of the Union Budget to updates in credit card policies, here’s a rundown of what to expect:

1. Union Budget 2024

This July, Finance Minister Nirmala Sitharaman will present the first Union Budget of the newly elected government. Anticipate potential changes in income taxes, medical expense deductions, increased tax rebates, and enhanced pension benefits. The specifics of these changes will be revealed in the Union Budget 2024.

2. Income-Tax Returns

The deadline for filing your income-tax returns for the assessment year 2024-25 is July 31. To avoid last-minute hassles, it is advisable to begin the filing process well ahead of the deadline.

Financial Changes

3. SEBI on Joint Mutual Fund Portfolios

The Securities and Exchange Board of India (SEBI) announced that mutual fund portfolios and demat accounts will not be frozen for non-submission of nominations. This means investors holding securities in physical form will continue to receive dividends, interest payments, and redemption payments, as well as have the ability to lodge grievances.

4. Citibank Credit Cards Transition to Axis Bank

By July 15, Citibank credit cards will be fully migrated to Axis Bank. Axis Bank has introduced new card variants to accommodate Citi credit card users. Notably, the card PIN, number, expiry date, and CVV of existing Citi cards will remain unchanged.

5. YES Bank Credit Card Updates

Starting July 1, YES Bank credit cardholders can unlock complimentary domestic lounge access by spending ₹35,000 or more in a calendar quarter. Eligible cards include YES Marquee, YES SELECT, YES Reserv, YES First Preferred, YES Bank ELITE, YES BYOC, and YES Wellness Plus.

6. Paytm Wallet Closures

From July 20, 2024, Paytm Payments Bank will begin closing inactive wallets with nil balances and no transactions for over a year. Affected users will receive a 30-day notice before their wallets are deactivated.

7. HSBC Bank Credit Card Changes

Effective July 1, certain transactions will no longer accrue reward points for HSBC Bank credit cardholders. These transactions include education and government-related payments, insurance premiums, e-wallet loading, fuel transactions, tax payments, and utility transactions.

Financial Changes

8. PNB Debit Card Updates

Starting July 1, 2024, Punjab National Bank (PNB) will update its lounge access program for RuPay Platinum Debit cardholders. The new program offers:

  • One complimentary domestic airport or railway lounge access per quarter
  • Two complimentary international airport lounge accesses per year
  • An authorization charge of ₹2 for airport lounge access

Read More: Eight Essential Tips for First-Time Taxpayers Filing Their ITR for FY 2024

These changes highlight the dynamic nature of financial policies and their potential impact on your daily transactions and overall financial planning. Stay informed and plan accordingly to make the most of these updates.

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THE PROMISING BENEFITS OF STAND UP INDIA SCHEME FOR WOMEN ENTREPRENEURS

The Stand-up India Scheme, launched by the Government of India in 2016, is an innovative initiative aimed at promoting entrepreneurship among women and marginalized sections of society. This transformative scheme primarily focuses on fostering inclusive growth, financial empowerment, and job creation. By providing access to funding, handholding support, and facilitating entrepreneurship, Stand-up India has emerged as a catalyst for change in the Indian business landscape.

 

 

Key Objectives of Stand-up India Scheme

 

1. Encouraging Entrepreneurship

The scheme aims to encourage the growth of entrepreneurship among Scheduled Castes (SC), Scheduled Tribes (ST), and women entrepreneurs in India. It intends to develop a robust ecosystem for start-ups and promote inclusive economic growth.

 

 

stand up India

 

2. Ensuring Access to Capital

One of the primary objectives of the Stand-up India Scheme is to ensure access to financial support for new ventures. Under this scheme, collateral-free loans ranging from ?10 lakhs to ?1 crore are provided to eligible SC/ST and women entrepreneurs for setting up new enterprises.

 

 

Eligibility Criteria for Stand-up India Scheme

 

Who can apply?

 

  • Women entrepreneurs
  • Scheduled Caste (SC) or Scheduled Tribe (ST) entrepreneurs

 

Business criteria

 

1. Nature and scope of the business

The Stand-Up India scheme, initiated by the Government of India, has specific business criteria that need to be fulfilled by the applicants. The first point is the nature and scope of the business. The scheme aims to promote entrepreneurship among women and Scheduled Castes (SC) or Scheduled Tribes (ST) individuals, focusing on sectors such as manufacturing, services, and trading. Potential beneficiaries can choose businesses that align with these criteria.

 

 

stand up India

 

 

2. Age and experience requirements

Another important criterion is the age and experience requirements. To be eligible for the scheme, the applicant must be at least 18 years old and not exceed 65 years of age. Additionally, they should have prior experience in the field they intend to enter. This ensures that the beneficiaries have the necessary skills and knowledge to manage their businesses effectively.

 

 

3. Financing requirements and existing bank accounts

Financing requirements and existing bank accounts are also considered under the Stand-Up India scheme. The scheme provides financial assistance through loans ranging from Rs. 10 lakh to Rs. 1 crore, depending on the nature of the business. The applicant is required to present a viable business plan, which includes the financing requirements for their venture. Furthermore, the beneficiary must have an existing bank account, which will be used for all financial transactions related to their business.

 

 

Benefits for Businessmen

 

1. Financial Assistance

Businessmen belonging to the SC/ST or women entrepreneurs can take advantage of the Stand-up India Scheme by availing collateral-free loans from associated banks to start or expand their businesses. This financial support can be instrumental in overcoming the initial hurdles of funding that commonly obstruct the path to entrepreneurship.

 

 

2. Lower Interest Rates

Stand-up India Scheme offers loans at a significantly lower rate of interest compared to traditional loans, making them more accessible and affordable for businessmen. The reduced interest rates empower entrepreneurs to invest more in their ventures and focus on growth.

 

 

3. Skilled Mentoring and Handholding Support

The scheme provides entrepreneurs with crucial support and guidance through the implementation process. Financial institutions that partner with the Stand-up India Scheme offer mentoring and handholding support that includes skill development, market linkages, networking opportunities, and knowledge sharing. This assistance equips businessmen with the necessary expertise to run successful enterprises.

 

 

4. Simplified Loan Application Process

The Stand-up India Scheme streamlines and simplifies the loan application process, making it easier for businessmen to access funds. With reduced paperwork and faster processing times, this scheme paves the way for timely financial assistance.

 

 

stand up India

 

 

5. Enhanced Business Opportunities

By actively supporting SC/ST and women entrepreneurs, the government aims to build an inclusive ecosystem that promotes business collaborations with these segments. Partnering with these entrepreneurs not only allows businessmen to contribute to social and economic empowerment but also opens up new market opportunities and partnerships.

 

 

Read More: A Complete Overview of GSTR 2A Reconciliation

 

 

 

The Stand-up India Scheme has emerged as a significant game-changer for promoting entrepreneurship and encouraging economic growth among women and marginalized sections of society. By providing unmatched financial support, handholding assistance, and mentorship, the scheme empowers businessmen to convert their entrepreneurial dreams into reality. With increased accessibility and lower interest rates, the Stand-up India Scheme paves the way for a diverse and inclusive entrepreneurial landscape in India. It is crucial for businessmen to explore and leverage the benefits of this transformative scheme to unlock their potential and contribute to India’s economic development.