Cash Deposit Limit in Savings Account: If you are unable to respond to the Income Tax Department’s notice properly or you do not have sufficient evidence, strict action can be taken against you. This may include freezing your bank account and even going to jail.
Cash Deposit Limit: Do you know that the Income Tax Department can question you if you deposit more cash than a limit in your bank account? Yes, this is true. If you have deposited more than Rs 10 lakh in your savings account in a year, then you may come under the radar of Income Tax. So if more money has suddenly come into the bank account, then get ready to answer the questions of 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 has come from and why tax was not paid on it.
This step has been taken to prevent tax evasion
This step of the Income Tax Department has been taken to curb black money and prevent tax evasion. The department believes that if a person is depositing a huge amount of cash, then he may be hiding his income source.
What will happen if you deposit more than Rs 1 lakh in a day?
If you have not crossed the limit of Rs 10 lakh in a year, but if you have deposited an amount of more than Rs 1 lakh in a day, then also the Income Tax Department can question you. So be careful while depositing a large amount in the bank. Follow the rules of the Income Tax Department and always keep the proof. This will help you avoid any kind of trouble in the future.
Bank account can be frozen and you can go to jail
If you are unable to respond to the notice of the Income Tax Department properly or you do not have sufficient evidence, then strict action can be taken against you. This may include freezing your bank account and even going to jail.
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 came from. Is it part of your salary, a gift, or a loan repayment?
- 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. Don’t deposit too much cash at once.
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