Saturday , July 13 2024

Before depositing cash in your savings account, you must know these rules of RBI.. | Live Updates, Unveiling the Latest India News Trends

Almost every citizen in our country has a savings account in the bank. Everyone has a bank account because of the zero balance account. Employees have salary accounts. Traders deposit large amounts of money in the savings account. By linking it to UPI, we make transactions (zero balance account) easy. We keep depositing and withdrawing money in that account. However, many people do not know that there are some rules regarding these deposits and withdrawals. The Income Tax Department keeps a close watch on those who deposit and withdraw large amounts. You should be aware of those rules so that you do not face any problems.

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According to the rules of the Income Tax Department, depositing cash is restricted. That is, we have to deposit cash only up to a certain amount. The Income Tax Department has imposed such a provision to prevent illegal financial activities like money laundering (bank account cash limit) and tax evasion. Let us now see complete information about it.

What is the deposit limit?
As per the rules, if you spend Rs 10 lakh or more, you will have to inform the Income Tax Department about it. If you have a current account, the limit is Rs 50 lakh. This cash is not taxed immediately, but financial institutions will have to inform the Income Tax Department about transactions above this limit. People who have not filed tax returns for the last three years will have to pay 2% TDS. This is also payable only on withdrawals above Rs 20 lakh (savings account cash limit). People who have Rs 1 crore in a particular financial year will be charged 5% TDS.

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Penalty on cash deposit
TDS exempted under section 194N of the Income Tax Act is not classified as income. But it can be used as a credit while filing income tax returns (ITR filing tips). As per section 269ST of the Income Tax Act, if a person has Rs 2 lakh or more in cash (cash limit rule in bank) in a particular financial year, then a penalty will be imposed on him. This penalty does not apply to withdrawing money from the bank. TDS deduction is applicable on withdrawals above a certain limit.