Are you aware of the amount of cash you can put into and take out from your bank savings account in a fiscal year without being examined by income tax officials? Financial specialists stated that according to income tax regulations, the overall cash deposit or withdrawal in a savings account over a financial year must not surpass Rs 10 lakh.
Any cash deposits exceeding Rs 10 lakh in total across all your savings accounts within a financial year (April 1 to March 31) must be disclosed to the income tax authorities. Banks are required to report these transactions, even if they are distributed over several accounts.
Transaction exceeding the Rs 10 lakh threshold is regarded as a high-value transaction
Any transaction exceeding the Rs 10 lakh threshold is regarded as a high-value transaction. Financial institutions or banks are required to inform the income tax department in accordance with section 114B of the Income Tax Act, 1962. You are required to give your PAN number when you deposit over Rs 50,000 in a single day. If you lack a PAN number, you need to file Form 60/61.
What if someone get an income tax notice?
How should one reply to an income tax notice? To address an income tax inquiry related to a substantial cash transaction, you need documents such as bank statements and investment records that validate the source of the funds. If you feel uncertain or worried about reporting the source of cash, it could be helpful to seek advice from a tax consultant. Regarding cash transactions, according to section 269ST, no individual may receive over Rs 2 lakh from anyone under any of the following conditions –
- In all, from an individual in a single day.
- in connection with any particular transaction.
- Or concerning a transaction with any individual pertaining to a specific event or instance.