Saving Account Limit: You may also have a savings account, but do you know how much money can be kept in such an account. How much money should you keep in your savings account so that it does not fall under the radar of income tax? If you cross this limit or there is anything wrong with depositing money, you may also have to face income tax notice.
Saving Account Limit: Nearly 900 million people in the country have savings accounts. This number has grown rapidly, especially after the introduction of Jan Dhan accounts. Having a savings account makes transactions easier, but there’s one thing that very few people are aware of. Do you know how much money can be kept in a savings account to avoid facing an income tax notice? If you want to avoid any trouble, it’s best to understand this income tax rule thoroughly.
Indeed, many people keep large sums of money in their savings accounts for safety. But did you know that depositing or transacting excessively in your bank account could attract the attention of the Income Tax Department. In such a situation, you could even receive a notice from the department? Therefore, it’s important to be aware of the rules in advance so that you know the limits and other aspects before depositing money into a savings account.
When does the Income Tax Department take notice?
The Income Tax Department doesn’t issue a notice simply because of the amount of money deposited in your account. The Income Tax Department primarily monitors large cash deposits or suspicious transactions. Under current regulations, banks report deposits totaling ₹10 lakh or more to a savings account in a single financial year. For current accounts, this limit is ₹50 lakh.
Notice on Cash Deposits
This limit of Rs 10 lakh on savings accounts can also be calculated by combining multiple accounts. However, the Income Tax Act stipulates that if you deposit more than Rs 10 lakh in cash annually, the information must be reported to the Income Tax Department. A similar rule applies to current accounts. The only caveat is that you must ensure that you do not deposit cash into your account.
In what types of cases do you receive a notice?
- If your sources of income are clear and you have provided correct information about your income in your ITR, there are usually no problems.
- If there is a discrepancy between your income and the amount deposited, you may receive a notice.
- Repeated large cash transactions can also result in a tax notice.
- If you make large transactions without filing your ITR, you may also face difficulties.
- You may also receive a tax notice if your PAN is not linked.
- If any suspicious transactions are detected, you will definitely receive a notice.
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The post Tax on Savings Account: Keeping this much money in a savings account will result in an income tax notice, know the rules first appeared on informalnewz.
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