Savings Account : The main purpose of savings accounts is to deposit money and withdraw money when needed, but do you know that the Income Tax Department has set a limit for depositing cash in bank accounts? If you exceed this limit, the department can send you a notice, and if you do not respond to it, you may also have to face action from the department. So let’s know how much cash is safe to deposit and what are the rules applicable to it.
How much cash can be deposited in a financial year?
According to the Income Tax Department, if you deposit more than Rs 10 lakh in your savings account in a financial year, the department can send you a notice. In this notice, you may be asked where this money came from and why the tax for this money was not paid. You have to give a proper answer to this. If you do not answer it correctly, the department can take action against you.
The Income Tax Department wants to ensure that people do not convert black money into white, so it is being strictly monitored.
How many rupees can be deposited in a day?
The Income Tax Department says that if you deposit more than Rs 1 lakh in your bank account in a day, you may get a notice from the Income Tax Department, even if you have not crossed the limit of Rs 10 lakh. To avoid this, you should be fully aware of the rules, and if you have proof of income, you can avoid these problems.
Why did the Income Tax Department implement this rule?
The Income Tax Department has implemented this rule with the aim of preventing tax evasion and controlling black money. The department believes that a person depositing more cash usually tries to hide the source of income. That is why the department has started the process of sending notices in such cases and asking for proof of source.
What if you do not follow the rules? | Savings Account
If you do not respond to the Income Tax Department’s notice on time and correctly or you do not have sufficient evidence, your bank account can be frozen, and you can also go to jail. This situation can arise when you are unable to properly prove the source of your deposit.
Always keep these things in mind.
- While depositing money in a bank account, you should keep some important things in mind so that any kind of trouble can be avoided:
- Prove the source of money: Whenever you make a large deposit, make sure that the source of that money is clear. This source can be a salary, loan, gift, or bank transfer.
- Keep receipts and bank transaction slips: When you deposit money, it is important to keep receipts, bank transfer slips, or transaction details. This will help you prove the source of the money.
- Fill out income tax returns: If your deposit falls under taxable income, mention it in the income tax return and inform the income tax department about it.
- Do not deposit a large amount at once: Never deposit a very large amount in your bank account at once. Increasing the deposit amount gradually through small transactions can be a good way.
Conclusion
Opening a bank account (Savings Account) and depositing money is very common in today’s time, but it is equally important to follow the rules of the Income Tax Department. If you keep these rules in mind while depositing cash, then you will not have to face any kind of trouble. Properly certify the source of your money and always follow the rules of the Income Tax Department so that there is no notice or problem of any kind in the future.
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