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Saving Bank Account news update: You must have a savings account in some bank or the other. All of us women use savings accounts. One or the other of your savings accounts must also be linked to UPI transactions. Sometimes you use this account to deposit cash and sometimes to withdraw a large amount at once. But do you know that there are some rules related to it which come under the rules and regulations of the Income Tax Department. Therefore, it is important to follow them so that you do not have to face any problem.
Why and what is the rule of deposit in current and savings….
According to the Income Tax rules, there is a limit on depositing cash in a savings account. That is, how much cash can you deposit in a bank account in a fixed period. Actually, this limit has been made to keep an eye on cash transactions. So that, money laundering, tax evasion and other illegal financial activities can be stopped. According to the report given in Forbes, if you deposit Rs 10 lakh or more in a financial year, then you will have to inform the IT department about it. However, if you have a current account then this limit is Rs 50 lakh. According to the report, there is no immediate tax on this cash, but it is a rule for financial institutions to inform the Income Tax Department about transactions above these limits.
What is section 194A..is it useful for you?
If you withdraw more than Rs 1 crore from your savings account in a financial year, then 2% TDS will be deducted on it. Those who have not filed ITR for the last three years, 2% TDS will be deducted on them, that too only on withdrawals of more than Rs 20 lakh. If such people withdraw Rs 1 crore in this particular financial year, then 5% TDS will be levied.
It is worth noting that TDS deducted under section 194N is not classified as income, but you can use it as a credit while filing income tax return (ITR).
What is section 269ST under which penalty can be imposed?
Under Section 269ST of the Income Tax Act, if a person deposits Rs 2 lakh or more in cash in a particular financial year, then a penalty will be imposed on him. However, this penalty does not apply to withdrawals from the bank. However, TDS deduction is applicable on withdrawals above a certain limit.