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.
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.
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:
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.
If you cannot provide a satisfactory explanation for the source of the deposited funds, you might face severe tax implications:
Instead of keeping large amounts of cash in your savings account, consider alternative options:
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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