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Savings Account Cash Limit: Not only is the money safe in a bank account, but interest is also earned on it. In the last few years, a large population in India has been connected to the banking system. 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 as much money as you want 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.
Of course there is no limit to how much money you can keep in a savings account, but if you deposit more than Rs 10 lakh in a financial year, banks inform the Central Board of Direct Taxes (CBDT). The same rule applies to FDs as well. It also applies to cash deposits, investments in mutual funds, bonds and shares.
Tax may be levied on interest
According to a report by Live Minute, tax and investment advisor Balwant Jain says that an Indian can keep as much as he wants in a savings account. There is no limit in the Income Tax Act or banking rules for depositing money in a savings account. A bank account holder has to pay tax on the interest earned on the amount deposited in a bank savings account.
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 avail 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 department is not satisfied with the account holder's answer, it can also investigate. If the source of the money is found to be wrong during the investigation, the Income Tax Department can impose 60% tax, 25% surcharge and 4% cess on the deposit.