Savings Account: What is the limit for depositing cash in a bank account, know RBI rules

Savings Account: In the present times, a bank account has become a necessity for everyone. Most people in the country keep a savings account in the bank, because the money kept in the bank is considered more secure. But do you know what is the limit for depositing cash in a bank account?

Breaking News, Digital Desk- (RBI Cash Deposit Rules) In the present times, a bank account has become a necessity for everyone. Most people in the country keep a savings account in the bank, because the money kept in the bank is considered more secure. 

Whether a person is employed, a student or a businessman, they have one or more savings accounts. Depositing cash in savings accounts (Savings Accounts Cash Deposit Limit) is very common, especially for those who deal in cash.  

How much cash is right to keep in a savings account? 

But do you know how much cash is safe to deposit in these accounts? Most people keep depositing money on a daily basis, but are unaware of some important rules of RBI and Income Tax. It is possible that they unknowingly deposit such cash which may lead to an Income Tax notice.

Do you know the limit of keeping cash in a savings account? 

Let us tell you that frequent deposits or large cash amounts can attract the attention of the Income Tax Department. By knowing the RBI's fixed limit and the related tax rules, you can avoid investigation or penalty. So, let us tell you those important rules related to savings account which are very important for you to know.

Savings account limit -

The Reserve Bank of India (RBI) and the Income Tax Department keep an eye on high value transactions. If you deposit more than Rs 10 lakh in your savings account in a financial year, your bank is required to report it to the tax authorities under the Annual Information Return (AIR). 

Let us tell you that this does not mean that you will be taxed for this, but if the transaction is more than your declared income, then it may come under investigation.

Current Account Limit?-

Let us tell you that the limit for cash deposit is higher for current account. You can deposit up to Rs 50 lakh in a current account in a financial year.

For which transactions is PAN required?

If a person deposits Rs 50,000 or more in cash at one go, it is mandatory to provide a PAN number (permanent account number). 

Additionally, even if each deposit is less than Rs 50,000, if the total deposits in a financial year exceed a certain limit, it may come under the scrutiny of the Income Tax Department, especially if the amount deposited is more than the declared income.

What happens if the limit is exceeded? 

If you deposit a large amount of cash without any legitimate source, the income department may question you under sections 131, 142(1) or 148. 

If you are unable to give a satisfactory answer about where the money came from, the amount can be treated as unexplained income and taxed at a flat rate of 60% under section 68, along with surcharge and cess.

Cash deposits and your Form 26AS or AIS-

All high-value transactions reported by your bank appear in your Form 26AS and the new AIS (Annual Information Statement). Tax officials use these records to match your filed income tax returns. 

If any discrepancy is found, you may receive a notice. Therefore, it is important to ensure that all high-value transactions are correctly reflected in your returns.