If you deposit Rs 10 lakh or more in a financial year, you have to inform the IT department.
Most of us have a savings account in some bank. One or the other of our savings accounts are linked to UPI. Sometimes we use this account to deposit cash and sometimes to withdraw a larger amount at once. Do you know that there are some rules in this regard which come under the rules of the Income Tax Department? So it is important to follow them so that you don’t get into any trouble. Under the Income Tax rules, there is a cap on cash deposits in savings accounts. That is, how much cash can one deposit in a bank account in a particular period. This cap has been introduced to keep a tab on cash transactions. This way, money laundering, tax evasion and other illegal financial activities can be prevented.
According to a report, if you deposit Rs 10 lakh or more in a financial year, you have to inform the IT department. If you have a current account, the limit is Rs 50 lakh. According to the report, this cash will not be taxed immediately, but the financial institutions will have to report transactions exceeding these limits to the Income Tax Department.
Those who have not filed tax returns for the last three years will have to pay 2% TDS and that too only on withdrawals of more than Rs 20 lakh. If these people withdraw Rs 1 crore in that particular financial year, 5% TDS will be levied.
It is worth noting that the TDS deducted under section 194N is not classified as income, but can be used as a credit while filing the Income Tax Return (ITR).
Read More: Filed Wrong Details In ITR? Know How Many Times You Can Revise Return
Under section 269ST of the Income Tax Act, if an individual deposits Rs 2 lakh or more in cash in a particular financial year, a penalty will be imposed. This penalty will not apply to withdrawing money from the bank. The TDS deduction will apply to withdrawals above a certain limit.
