Saving Account: It’s important to have a savings account in a bank. Many women utilize a savings account. Your savings account may also be associated with UPI transactions. You may use this account to deposit cash or withdraw a significant amount at once.
Nevertheless, are you aware that there are specific regulations governing this under the Income Tax Department’s rules and regulations? It’s essential to follow them to avoid any inconvenience. Savings accounts have a cash deposit limit according to income tax regulations.
So, within a defined period, you can deposit any amount of cash into a bank account. This limit is designed to monitor cash transactions effectively. It aims to prevent activities like money laundering, tax evasion, and other illicit financial activities.
According to a report in Forbes, if you deposit 10 lakh rupees or more in a financial year, you are required to inform the IT department about it. However, if you have a current account, this limit is 50 lakh rupees.
The report indicates that no immediate taxes are levied on such cash transactions; however, financial institutions must adhere to regulations requiring them to report transactions exceeding these limits to the tax authorities.
Should you withdraw over 1 crore rupees from your savings account within a financial year, a 2% TDS (Tax Deducted at Source) will be deducted. Furthermore, individuals who have not filed IT returns in the last three years will face a 2% TDS deduction, specifically on withdrawals exceeding 20 lakh rupees. Additionally, those withdrawing 1 crore rupees in this current financial year will incur a 5% TDS.
It’s important to understand that TDS deducted under Section 194N is not treated as income but can be used as a credit when filing your Income Tax Return (ITR).
