Income Tax News: Managing multiple bank accounts comes with the responsibility of understanding the cash deposit limits to avoid potential income tax consequences. It’s crucial to grasp these regulations, as exceeding certain thresholds in your savings accounts could result in taxable implications. Let’s delve deeper into these limits and their implications.
Daily Deposit Limits
In a savings account, you can deposit a maximum of 1 lakh rupees in a day. However, for occasional deposits, this limit can be extended to 2.5 lakh rupees. As for the annual limit, a maximum of 10 lakh rupees in cash can be deposited into any savings account.
Taxation on Bank Deposits
If the interest earned on your bank deposit exceeds 10,000 rupees, you’re obligated to pay tax on that interest. It’s crucial to note that tax is applicable on the interest earned, not the deposited cash amount itself. Moreover, if the cash deposit in a savings account surpasses 10 lakh rupees, the bank is responsible for reporting this information to the Income Tax Department, potentially leading to severe penalties
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