Cash Deposit Limit in Savings Account: If you deposit cash above the prescribed limit and fail to explain its source, the Income Tax Department may issue a notice. This could result in a penalty, increasing your problems.
Cash Deposit Limit: People often wonder whether any amount of money can be deposited into a bank account at any time. This is especially true when someone receives a large sum of cash for a wedding, property deal, business payment, or emergency. However, if you deposit cash beyond a certain limit in the bank, you may be subject to scrutiny by the Income Tax Department. Therefore, it is important to understand the bank’s cash deposit rules clearly.
Cash Deposit Limit in a Savings Account
If you are depositing money in a savings account, a report is sent to the Income Tax Department if you deposit more than ₹10 lakh in cash during the entire financial year (April 1 to March 31). This means that if you deposit ₹10 lakh or more in a savings account (Savings Account Cash Deposit Limit) in a year, the bank will share this information with the tax department.
Separate Limit for Current Accounts
This limit is higher for current accounts, or business accounts. Deposits of ₹50 lakh or more in cash in a year are also subject to income tax scrutiny. If you are a businessman and frequently deposit large amounts in cash, keep a complete record of transactions and preserve proof.
How much cash can you deposit at one time?
There is no set limit for cash deposits by the bank. You can deposit up to ₹2 lakh or ₹5 lakh at one time. However, if the amount is large and your income or source is unclear, the tax department may question you.
PAN Required for Deposits Over ₹2 Lakh
If you deposit ₹2 lakh or more in cash at one time, you must provide your PAN number. Without a PAN, the bank will not accept cash exceeding ₹2 lakh.
Simply put, providing PAN is mandatory when depositing cash exceeding ₹2 lakh. Deposits exceeding ₹10 lakh in a savings account and ₹50 lakh in a current account in a year result in a report being sent to the Income Tax Department. To avoid this, keep a complete record of transactions.
Know the rules, or you could face a fine.
If you deposit cash above the prescribed limit and fail to explain its source, the Income Tax Department can issue you a notice. This could lead to a fine and further problems. Therefore, use digital payments as much as possible, and keep a record of any cash transactions. If you are ever considering depositing a large sum of cash, keep these rules in mind.
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