Saving Account: Most people across the country open two types of accounts in the bank, one of which is a savings account and the other is a current account. Although there is no shortage of account holders with savings accounts in banks, a small mistake by the savings account holder may cause them to pay a heavy penalty. If you also keep a savings account in a bank account, then let us know through the news about some important rules of the Income Tax Department regarding savings accounts.

Income Tax Department's conditions regarding transactions-

The Income Tax Act has made some rules regarding savings account transactions. If you also have a savings account in the bank, then it is linked to digital transactions like UPI, but the Income Tax Department has laid down some conditions for large transactions (Cash Deposit and Withdrawal Rules). These rules have been laid down so that money laundering, tax evasion, and other illegal financial activities can be prevented.

What is the cash deposit limit in savings and current accounts?

-Savings Account Deposit Limit

If you have a savings account in a bank account, then you should inform the Income Tax Department (IT rules in saving accounts) if you deposit Rs 10 lakh or more in a financial year. This helps the officials to detect suspicious activities and also helps in tracking the flow of large transactions.

-Current Account Deposit Limit

On the other hand, this limit is slightly higher for current accounts as compared to savings accounts. It is necessary to inform the Income Tax department if you deposit more than Rs 50 lakh in a financial year in a current account (Current Account Deposit Limit).

Note that no tax has to be paid immediately on these deposits, but it is necessary to report it to the financial institutions if you make transactions above these limits.

Rules regarding cash withdrawal

Special rules have been made by the Income Tax Department (income tax department rules) regarding tax. If you withdraw more than Rs 1 crore in a financial year from your savings account, then you will have to pay 2 percent TDS (tax deduction at source) for this. Along with this, if you have not filed Income Tax Returns for the last three years, then the TDS rate is strict. If you withdraw more than Rs 20 lakh, then 2 percent TDS applies to it by the Income Tax Department, and the TDS rate increases to 5 percent on withdrawal of Rs 1 crore or more (Cash Withdrawal Rules). Along with this, the TDS deducted under section 194N is not classified as income.

Provision of penalty on large cash deposits-

The penalty is imposed by the Income Tax Department on large cash deposits (Income Tax penalty rules). For example, if a cash amount of Rs 2 lakh or more is deposited in a financial year, then there is a provision of penalty under section 269ST of the Income Tax Act. However, let us tell you that this rule applies only to cash deposits. Even though cash withdrawal is under TDS (Tax Deducted at Source) for high amounts, there is no penalty under this section.

Know why this rule is important-

These rules have been made by the Income Tax Department (rules of saving account) so that illegal activities can be prevented. According to this guideline of the Income Tax Department and the Government (Government guidelines in saving account), it helps in monitoring and regulating cash transactions in India and along with this it is a part of the government's effort to ensure transparency and prevent things like tax evasion.

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