Income Tax: If you have deposited more than ₹ 10 lakh in cash in your savings account in a financial year, then the Income Tax Department can question you. Banks have to report such high-value cash transactions to the Income Tax Department. Therefore, if a large amount of money is suddenly deposited in your account, you should be ready for clarification from the Income Tax Department.

You may be sent a notice by the Income Tax Department. In this notice, you have to tell where this money came from and why tax was not paid on it. (Income tax department)

This step has been taken to prevent tax evasion-
This step of the Income Tax Department is aimed at controlling black money and preventing tax evasion. The department believes that excessive cash deposits can be a sign of suspicious financial activities, where the person is trying to hide the source of their income.

What will happen if more than Rs 1 lakh is deposited in 1 day?

If you have not crossed the limit of Rs 10 lakh in a year, but you have deposited more than Rs 1 lakh in a day, the Income Tax Department can still question you. So be careful while depositing a large amount in the bank. Follow the rules of the Income Tax Department and always keep proof. This will help you avoid any kind of trouble in the future. (Income tax)

Bank account can be frozen and jail can be done-
If you do not respond correctly to the notice of the Income Tax Department or do not have sufficient evidence, strict action can be taken. In this, bank accounts can be seized, and in serious cases, you may have to go to jail. Therefore, respond immediately upon receiving the notice and submit all the necessary documents. If you have any doubts, consult a tax advisor. It is important to respond on time and correctly.

Keep these things in mind while depositing money in a bank account-
- Whenever you deposit a large amount in the bank, keep proof of it. This proof can be a receipt, a bank transfer slip, or a transaction statement.

- You should be able to tell where the money has come from. Is it a part of your salary, or a gift, or a loan repaid?

- If the money deposited in your account is taxable, you will have to show it in your income tax return.

- If you have to deposit a large amount, do it in several small transactions. Do not deposit too much cash at once.

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