Income Tax Rules 2025 : Banks are well known for being useful in money deposit and withdrawal. Implies that the money is kept safe in bank savings accounts, where it will be conveniently withdrawn when needed. Have you wondered how much money you can save in a savings account? The following article discloses how much you can deposit in your bank account according to Indian Income Tax rules and the rules regarding the same.
(Income Tax Rules 2025) Limits of cash deposit and withdrawal from savings accounts
According to Income Tax rules, an individual should not deposit cash over Rs 10 Lakh or withdraw cash of more than Rs 10 lakh during one financial year in his savings accounts. This means if you cross this limit, then the Income Tax Department might send you an inquiry. Not just stopping there, you would have to know why it becomes important for you to learn about cash transactions in the bank and auditing procedures to avoid the probing eyes of the Income Tax Department.
Cash transaction limit at a glance
This another rule to always keep in mind-the limits imposed on daily cash transactions. Section 269 ST of the Income Tax Act puts a restriction on a person, who should not adopt cash transactions worth more than Rs 2 lakh in a single day. This implies that whatever makes a cash deposit or cash withdrawal exceeding Rs 2 lakh in a single day is automatically identified as a violation of rules. Also, any amount that exceeds Rs 10 lakh in a single financial year and is deposited in cash in any bank accounts should be reported to the Income Tax Department by the bank, irrespective of a single or multiple accounts in which the deposit is made.
Duties of Reporting to Banks
All banks or financial institutions shall notice report of any cash deposit or deposits in excess of Rs 10 lakhs and above into the coffers of the Income Tax Department. Such cash deposits are deposits of more than Rupees 10 lakh in cash during a financial year and would qualify as high-value transactions, which the Income Tax Department could investigate. Besides, when you make a cash deposit of an amount exceeding Rs 50,000 in a day, get ready to furnish only your PAN number. In case you do not have a PAN, use Form 60/61 instead.
PAN and Form 60 / 61 Requirement
You will need to furnish your PAN if you tend to deposit more cash as Rs 50,000 in one day. This will really help the income tax department in recording the transaction properly done by you, and after that, the income tax liability for you will be settled. And if you do not have a PAN number, then you would have to complete Form 60/61 for that. In fact, Form 60/61 is the alternative method you can use to prove identity and source of income.
Responding to a Tax Notice
In case of any notice from the Income Tax Department regarding a high-value transaction, the taxpayer has to respond in a clear and accurate manner. In such a case, the person would have to give along with such a notice a bank statement copy, investment certificate, or any other document certifying that the cash deposited is very true. For those who do not possess any more documents, the proper statement in itself would be sufficient to explain the transaction meaning.
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