Savings Account: Income Tax Department will send a notice if you deposit or withdraw more money than this limit in your bank account, know the rules

Savings Account: The Income Tax Department keeps a close watch on your income as well as your financial transactions. If your salary exceeds a certain limit, you will have to pay tax. The department can take action against you for not paying taxes. Apart from your earnings, daily and annual deposits in the savings account are also under the surveillance of the Income Tax Department, so it is important to maintain transparency in all transactions.

As per RBI rules, you can deposit up to Rs 10 lakh in cash in your savings account in a year without any monitoring. On depositing more than this limit, the bank immediately informs the Income Tax Department, due to which you may get a notice. However, this does not mean that you have to pay tax on it, but you will have to tell the source of this money.

What will happen if you cannot tell the source?

If an account holder is unable to tell the source of his income, then the Income Tax Department can levy 60% tax, 25% surcharge, and 4% cess on that amount and recover a total of 89.59%. This rule applies to transactions of any period, be it a year or a day, because the Income Tax Department has fixed the transaction limit.

You cannot do a cash transaction of more than Rs 2 lakh in a day. A cash transaction does not only mean withdrawing money from the account. It includes withdrawing cash as well as transferring from one account to account or making a payment to someone. Therefore, the cash transaction limit of any bank for a day is kept less than Rs 2 lakh.

Rules related to cash deposit in brief-

- There is no need for a PAN card for depositing up to Rs 50,000 in the bank.

- You will have to provide your PAN card if you deposit more than Rs 50,000.

- If Rs 2 lakh or more is deposited in your savings account in a day, a penalty of 100 percent can be imposed under section 269ST of the Income Tax Act.

The maximum amount you can deposit in your savings account in a year is Rs 10 lakh.

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