Savings Account News: Do not deposit so much money in your bank account at once, Income Tax Department will send a notice to your home

News, Digital Desk- ( Savings Account) Do you know how much cash you can deposit or withdraw in a financial year from your bank savings account to avoid scrutiny by the Income Tax Department? According to personal finance experts, under Income Tax rules, the total cash deposit or withdrawal in a savings account in a financial year should not exceed Rs 10 lakh.

Any cash deposit of more than Rs 10 lakh across all your savings accounts during a business year (April 1 to March 31) must be reported to the income tax department. Banks must disclose such transactions, even if they are spread across multiple accounts.

What happens after the Rs 10 lakh limit?

Amounts above the Rs 10 lakh limit are considered high value transactions. Banks or financial companies must report this to the income tax department under section 114B of the Income Tax Act, 1962.

You will need to provide your PAN number if you deposit more than Rs 50,000 in a day. If you do not have a PAN number, you will need to submit Form 60/61.

How to respond to an income tax notice?

To respond to an income tax notice for high-value cash transactions, you will need documents such as bank statements and investment records. 

These documents will prove where you got the money from. If you are unsure or concerned about the source of the cash, it would be beneficial to consult a tax advisor.

As far as cash transactions are concerned, as per section 269ST, no person can receive more than Rs 2 lakh from any person in any of the following circumstances –

- Total from any person in one day.

- In relation to a single transaction.

- or in relation to a transaction with any person relating to a single event or occasion.