Here it is not necessary that only 10 lakhs should be deposited or withdrawn in a lump sum in a year in the savings account. If even a few lakh rupees are deposited up to 10 lakh or a total of 10 lakh is withdrawn in turn, then the chances of notice increase more.
This is a common question raised by most of the people. People want to know how many savings accounts they can run simultaneously so that there is no problem with income tax. The second question is that what is the maximum balance that can be kept in the savings account so that the income tax notice is not received. There are many such confusions in the mind of the taxpayer regarding the savings bank account, which need to be cleared in time.
The answer is very simple. There is no such rule in Income Tax which states that the maximum number of savings accounts you can have so that the notice does not come. That is, income tax has nothing to do with the savings account. You can have as many accounts as you want. There is no limit on the maximum amount to be kept in the account, which is linked to income tax. You can keep as much money as you want. The real rule of income tax is applicable on transactions. That is, how much money and where do you spend from the savings account. Whether you do it in cash or by credit-debit card, these things are taken care of.
Pay attention to cash transactions
If you want to avoid the notice of income tax, then you have to take care of cash transactions. If you pay attention to this, then you will be able to avoid income tax action. In a year, you have to keep in mind that not more than 10 lakh transactions are to be done. Can neither withdraw more than 10 lakhs nor can deposit more than 10 lakhs in that savings account. If you break this rule, then you can come under the purview of income tax notice.
Here it is not necessary that only 10 lakhs should be deposited or withdrawn in a lump sum in a year in the savings account. If even a few lakh rupees are deposited up to 10 lakh or a total of 10 lakh is withdrawn in turn, then the chances of notice increase more. If you cross the 10 lakh limit, then income tax action is possible, no one can save it. This is the rule for savings bank account. The most important rule is that the single transaction should not exceed 2 lakhs and the total transaction should not exceed 10 lakhs in a year. If you break this rule then income tax action will be taken.
How much money to withdraw and deposit
Now the question is that if you do a transaction of more than 10 lakhs in a year or more than 2 lakhs at a time, then how does the income tax get its information? If your PAN is linked to a bank account and if you withdraw or deposit more than 10 lakhs from your savings account, then the Income Tax Department will get information about it through PAN.
If PAN is not linked, then the bank in which you will deposit or withdraw more than 10 lakhs, that bank informs the Income Tax Department. The Cooperative Bank and the Post Master General have also been appointed to provide information to the tax department. Money can be deposited or withdrawn through cooperative banks or post offices. Therefore, the Cooperative Bank and the Post Master General also have the right to give information.
Current account rule
In a financial year, if a person spends more than 10 lakhs in cash for buying bank drafts or taking pay orders, then he can get a notice. Action can also be taken for spending more than 10 lakhs in a financial year to buy a product which has been given the status of a prepaid instrument by the Reserve Bank. There is a similar rule for the current account as well, but the transaction limit has been kept at 50 lakhs. Can not deposit more than 50 lakhs in a year on current account, or can not withdraw more than 50 lakhs. This work cannot be done even by check.