You can only deposit a maximum of Rs 1 lakh per day in your savings bank account.
In banking and finance, it is crucial to understand the various limits imposed by income tax regulations in both sectors. Like any other account type, there also exist limitations pertaining to the cash deposit limit in savings accounts. As per the official guidelines, the amount of cash kept in your savings account, if exceeds a certain limit, is applicable for income tax deductions.
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The maximum amount of cash that can be deposited within a specified period without being liable to pay tax as per the rules by tax authorities, is the cash deposit limit in the savings account. The reason behind setting the limit is to regulate the flow of cash transactions along with curbing the potential possibility of money laundering, tax evasion and financial activities.
It is important to note that you can deposit a maximum of Rs 1 lakh per day in your savings bank account. However, the limit can exceed up to Rs 2.5 lakh in a day if it’s done once in a while. As far as the annual limit is concerned, the maximum cash that can be deposited in a savings account is Rs 10 lakh. If the amount of cash is below Rs 10 lakh, one does not need to pay any tax to IT Department.
Notably, as per the guidelines by the Central Board of Direct Taxes, it is mandatory for any bank to report cash deposits if it exceeds Rs 10 lakh in a financial year.
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The tax is not levied directly on the savings account money but on the interest you receive from the bank. The bank pays a certain interest for the money kept in the account to encourage their customers to deposit their money in the bank. The interest you receive from the bank is chargeable to tax as it comes under the profit in ITR forms. However, there is a limit. The interest received from the bank deposits, if exceeds INR 10,000, will be chargeable for any taxes.
