Cash Transaction Limit in India : Do you know that there is a limit on depositing or withdrawing money from a bank account? Personal finance experts say that according to income tax rules, you can deposit or withdraw only up to Rs 10 lakh in cash in your savings account in a year (from April 1 to March 31).
If you deposit or withdraw more than this limit, the bank gives its information to the Income Tax Department. Cash Transaction Limit in India Even if this money is in multiple accounts, the bank has to tell everything.
Cash Transaction Limit in India
What will happen if there is a cash transaction of more than Rs 10 lakh?
If you deposit or withdraw more than Rs 10 lakh in cash in a year in a bank, then it is considered a big transaction (high-value transaction). In such a situation, the bank has to give this information to the Income Tax Department.
Cash Transaction Limit in India If you deposit more than Rs 50,000 in a day in the bank, then you are required to provide PAN number. If you do not have a PAN number, you will have to fill Form 60 or Form 61.
If you get a notice from the Income Tax Department, there is no need to panic. You just have to keep these documents ready to give the correct information:
If you receive a notice from the Income Tax Department, what should you do at that time?
- Investment records – Account of where you have invested money.
- Source of cash – Proof of where the money came from.
- Bank statement – Copy showing bank transactions.
- If you have any problem with these documents, it would be better to seek help from a tax expert.
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Limits of cash transactions under Section 269ST
Under Section 269ST, if you take more than Rs 2 lakh in cash, it is prohibited. This can happen in 3 situations:
1.Taking more money from someone in a day.
2.Taking more money in a single transaction.
3.aking more money on a special occasion or event like a wedding.
Example: If you receive more than 2 lakh cash as a gift at a wedding, it will be like breaking the rules, and you can also be fined.
Personal experience and example:
Last time, a big businessman who repeatedly deposited money in his account and crossed the limit of Rs 10 lakh. After that, he received a notice from the Income Tax Department. Cash Transaction Limit in India But he showed his business records and bank statements and told that this money came from his business.
Learning point: When you transact cash, always keep all the records correct and show the correct documents if needed.
Key points:
- If you deposit or withdraw more than Rs 10 lakh cash in your savings account in a year, then you have to report it to the bank.
- If you deposit an amount of fifty thousand in a day, then it will be most important to give your PAN card number, keep this in mind
- Under section 269ST, more than Rs 2 lakh cash cannot be taken.
- Keep your bank statements and investment records ready to respond to income tax notices.
- Follow the rules while making cash transactions and plan your finances properly so that you do not have to face any legal problems.