INCOME TAX SAVING: You must have a savings account in some bank. All of us women use savings accounts. Some of your savings accounts will also be connected to UPI transactions.
Many times you must be using this account to deposit cash and sometimes to withdraw a large amount at once. That is why it is necessary to follow them so that you do not have to face any trouble.
Why and what is the rule of deposit in current and savings
According to the Income Tax rules, there is a limit on cash deposits in savings accounts. That is, how much cash can you deposit in the bank account during a fixed period.
According to a report in Forbes, if you deposit Rs 10 lakh or more in a financial year, you will have to inform the IT department. However, if you have a current account, the limit is Rs 50 lakh.
According to the report, there is no immediate taxation on this cash, but it is a rule for financial institutions to report transactions above these limits to the Income Tax Department.
What is section 194A, is it useful to you
If you withdraw more than Rs 1 crore from your savings account in a financial year, then 2% TDS will be deducted from it.
For those who have not filed ITR for the last three years, 2% TDS will be deducted from them, that too only on withdrawal of more than Rs 20 lakh. If such people withdraw Rs 1 crore in this particular financial year, then 5% TDS will be levied.
It is worth mentioning that the TDS deducted under section 194N is not categorized as income, but you can use it as a credit while filing an Income Tax Return (ITR).
What is Section 269ST which can impose a penalty
Under section 269ST of the Income Tax Act, if someone deposits Rs 2 lakh or more in cash in a person’s account in a particular financial year, then a penalty will be imposed on it.
However, this penalty does not apply to withdrawing money from the bank. However, a TDS deduction is applicable on withdrawals above a specific limit.
