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Most people have a savings account in some bank or the other. Savings account means savings account and many people use it to deposit cash and sometimes withdraw large amounts at once. But do you know that there are some rules associated with it and if you do not follow them then you may have to pay a fine. Today we will tell you about those rules.
Savings Account Deposit Rules
According to income tax rules, there is a limit on cash deposits in a savings account. You can deposit a maximum of Rs 1 lakh in cash in a day. According to Forbes' report, if you deposit Rs 10 lakh or more in a financial year, then you will have to inform the IT department about it. But if you have a current account, then this limit is Rs 50 lakh. According to the report, it is a rule for financial institutions to inform the income tax department about transactions exceeding these limits.
The Income Tax Department has set this limit to monitor savings accounts, current accounts and cash transactions of financial institutions to prevent money laundering, tax evasion and other illegal financial activities.
Know what is section 194A
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years, 2% TDS will be deducted from them, that too only on withdrawals of more than Rs 20 lakh and if such people have withdrawn Rs 1 crore in a financial year, then 5% TDS will be levied on them.
Section 269ST
Under Section 269ST of the Income Tax Act, if a person deposits cash of Rs 2 lakh or more in his account in a particular financial year, then a penalty will be imposed on him. However, this penalty is not imposed on withdrawing money from the bank. Let us tell you that TDS deduction is applicable on withdrawals above a certain limit.
