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Bank Account- In the last few years, a large population in India has been connected to the banking system. Not only is money safe in a bank account, but interest is also earned on it. The special thing is that there is no limit on opening a savings account in India. This means that a person can open any number of savings accounts.
In such a situation, it is important to know how much money a person can keep in a savings account. That is, you can deposit any amount in your savings account. Yes, except for the zero balance account, it is necessary to maintain a minimum balance in all other savings bank accounts.
There may be no limit on the amount of money you can keep in a savings account, but banks inform the Central Board of Direct Taxes (CBDT) if you deposit more than Rs 10 lakh in a financial year. The same rule applies to FDs as well. Cash deposits in FDs also apply to investments in mutual funds, bonds and shares.
Tax may be levied on interest
According to a Live Mint report, tax and investment advisor Balwant Jain says that an Indian can keep any amount of money in a savings account. There is no limit in the Income Tax Act or banking rules for depositing money in a savings account. The bank account holder has to pay tax on the interest earned on the amount deposited in the bank savings account.
The bank deducts 10% TDS on interest
The bank deducts 10% TDS on interest. Balwant Jain says that interest is taxable but tax deduction can also be availed on it. According to Section 80TTA of the Income Tax Act, all individuals can get tax exemption up to Rs 10,000. If the interest received is less than Rs 10,000, then no tax will have to be paid. Similarly, account holders above 60 years of age will not have to pay tax on interest up to Rs 50,000.
Income Tax Department may inquire about the source of money
If an account holder deposits more than Rs 10 lakh in a savings account in a financial year, the Income Tax Department can inquire about the source of the money. If the account holder is not satisfied with the answer, he can also check. If the source of the money is found to be wrong in the investigation, the Income Tax Department can impose 60 percent tax, 25 percent surcharge and 4 percent cess on the deposited amount.