You must have a savings account in some bank. Savings accounts are used by all of us women. You will also connect one or the other savings account to UPI transactions. Sometimes you will use this account to deposit cash and sometimes to withdraw large amounts simultaneously. But do you know that there are some rules related to it that come under the rules of the Income Tax Department? For this reason, it is necessary to follow them so that they do not have to give.
Income Tax rules
According to income tax rules, there is a limit on cash deposits in savings accounts. That is, the total amount of cash you can deposit in the bank account during a set period. Actually, this limit is designed to monitor cash transactions. So that money laundering, tax evasion, and other illegal financial activities can be prevented. According to the report given in Forbes, if you deposit Rs 10 lakh or more in a financial year, then the IT department will have to be informed.
By the way, if you have a current account, then this 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 beyond these limits to the income tax department. For those who have not filed ITR for the last three years, TDS of 2% will be deducted that too on withdrawals of more than Rs 20 lakh.
Know about TDS
If such people withdraw Rs 1 crore in this particular financial year, then a TDS of 5 percent will be charged. It may be noted that TDS deducted under Section 194N is not classified as income but can be used as credit while filing an income tax return (ITR). Under Section 269ST of the Income Tax Act, if a person deposits Rs 2 lakh or more in cash in a person’s account in a particular financial year, then it will be penalized. By the way, this penalty is not for withdrawing money from the bank. However, TDS deduction is applicable on withdrawals above a specified threshold.
