Bank Rules: If an account holder deposits more than Rs 10 lakh in a financial year in a savings account, then the Income Tax Department can ask the source of the money.
Bank Rules: Money is not only safe in a bank account, but interest is also available on it. In India, a large population has been connected to the banking system in the last few years. The special thing is that there is no limit on opening a savings account in India. That is, a person can open any number of savings accounts. In such a situation, it is important to know how much money a person can keep in a savings account. That is, you can deposit as much money as you want in a savings account. Yes, it is mandatory to keep a minimum balance in all other savings bank accounts except zero balance accounts.
There may not be any limit on keeping money in a savings account, but if you deposit more than Rs 10 lakh in a financial year, then the banks give its information to the Central Board of Direct Taxes (CBDT). The same rule applies to cash deposits in FDs, investments in mutual funds, bonds, and shares.
You may have to pay tax on interest
According to a report by Live Mint, tax and investment advisor Balwant Jain says that any Indian can keep any amount of money in a savings account. There is no limit set in the Income Tax Act or banking regulations for depositing money in a savings account. The bank account holder has to pay tax on the interest earned on the amount kept in the bank’s savings account.
The bank deducts 10 percent TDS on interest. Balwant Jain says that tax has to be paid on interest, but tax deduction can be availed on it as well. According to Section 80TTA of the Income Tax Act, all individuals can get tax exemption up to Rs 10,000. If the interest earned is less than Rs 10,000, then no tax will have to be paid. Similarly, account holders above 60 years of age do not have to pay tax on interest up to Rs 50,000.
Income tax department can ask about the source of money
If an account holder deposits more than Rs 10 lakh in a financial year in a savings account, then the income tax department can ask about the source of the money. If not satisfied with the account holder’s answer, then it can also investigate. If the source of money is found to be wrong in the investigation, then the income tax department can impose 60% tax, 25% surcharge, and 4% cess on the deposited amount.
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