Cash Deposit Limit Rule: The deposits and withdrawals from your bank account are subject to several income tax regulations. It’s important to use caution when taking out as well as depositing cash.
Cash Deposit Limit Rule: Your bank account is where you keep your money. You continue to add to and take out of it. But there are numerous regulations that apply to your bank account. You can have to pay up to 60% in taxes if you do this incorrectly. The Income Tax Department states that you will be responsible for paying this substantial tax, which includes a 4 percent cess and a 25 percent surcharge, if you deposit cash into your account without disclosing the source of your income. Allow us to introduce you to the cash deposit guidelines.
Cash Deposit Limit Rule: Should you fail to reveal the source of your money, you will be required to pay sixty percent of the tax.
The Income Tax Department may issue a notice prohibiting failure to identify the source of income and begin collecting sixty percent of the tax, as per Section 68 of the Income Tax Act. The government has made a consistent effort to get people to utilize cash in little amounts. The implementation of a cash deposit limit in savings accounts is aimed at curbing illicit financial activity, tax evasion, and money laundering.
Information on making a cash deposit of more than Rs. 10 lakh must be provided.
The Income Tax Act states that you must notify the tax authorities if you deposit more than Rs 10 lakh in a savings account during a financial year. This cap for a current account is Rs 50 lakh. It’s crucial to understand that depositing more cash than the maximum does not result in an immediate tax. Furthermore, no tax is due if you are successful in providing accurate information.
When more than Rs 1 crore is withdrawn, 2% TDS will be withheld.
According to Section 194N of the Income Tax Act, 2% TDS would be withheld from every withdrawal from a bank account that exceeds Rs 1 crore. You will have to pay 2% TDS solely on withdrawals over Rs 20 lakh and 5% TCS on withdrawals above Rs 1 crore, though, if you haven’t filed an ITR for the previous three years.
