Nowadays every person has a savings account, which helps to meet their financial needs. But many people are unaware of banking and income tax rules to run these accounts properly. Therefore, it is important to know what are the limitations of deposits and withdrawal in the savings account and how to follow them.
There are some rules for depositing and withdrawing money in a savings account which is necessary to follow. The purpose of these rules is to make financial transactions transparent and keep an eye on tax evasion. If you want to deposit more than Rs 50,000 a day in your savings account, then you have to give your PAN number or special identity number. Apart from this, after depositing more than Rs 10 lakh in a year, you will have to inform the Income Tax Department.
Apart from these rules, there are also limitations of cash transactions in the savings account. It is forbidden to do more than Rs 2 lakh in cash transactions in a day, whether it is at once or several times. This limit has been implemented under Section 269ST of the Income Tax Act. By following these rules, you can avoid the notice and other procedures of the Income Tax Department.
Savings Account Rules: An observation
The table below has an overview of savings account rules:
| Description | Rule |
| Daily deposit limit | PAN number required for depositing more than Rs 50,000 |
| Annual deposit limit | Income tax department will have to inform the deposit of more than Rs 10 lakh |
| Cash transaction limit | Can not do more than 2 lakh rupees cash transactions in a day |
| Source of deposit | It is necessary to mention the source of the deposited money |
| Receiving notice | Notice can be received from Income Tax Department on deposit more than Rs 10 lakh |
| Bank reporting | The bank reports to the Income Tax Department on the deposit of more than Rs 10 lakh |
| Financial year | The financial year from 1 April to 31 March is considered |
| Chartered Accountant Advice | It can be beneficial to consult a chartered accountant on receiving notice |
Limits of depositing in savings account
There are some rules for depositing money in a savings account which is necessary to follow. If you want to deposit more than Rs 50,000 in a day, then you have to give your PAN number or special identity number. Also, if you do not have PAN number, you can complete this work by filling Form 60/61.
In a year, you can deposit as much as you want, but for this you will have to tell the Income Tax Department where the money has come from and for this, adequate sources will also have to be given. If you deposit more than 10 lakh rupees, then you can get a notice from the Income Tax Department. In this situation, you have to give details of all your bank payments and also tell where you have received the money.
Cash transaction limitations
The limitations of cash transactions are also important in savings account. Under Section 269ST of the Income Tax Act, more than Rs 2 lakh cash transactions in a day are forbidden. This limit is applied to avoid any massive cash transactions, as well as to ensure the cradle of income tax rules.
This limit applies to a specific opportunity or transaction related to phenomenon. This means that it is forbidden to take more money than a person in a day, whether it is at one time or several times.
Rescue and withdrawal process in savings account
It is important to understand the process of deposit and withdrawal in savings account. When you deposit money in your savings account, you have to make sure that you stay within the prescribed limit. Also, when you withdraw money, you have to take care that you are not violating the range of cash transactions.
Submission process:
- PAN number required: PAN number will have to be given for depositing more than Rs 50,000.
- Source information: It is necessary to mention the source of deposited money.
- Annual limit: Income tax department will have to inform the Income Tax Department on deposits of more than Rs 10 lakh.
The process of withdrawal:
- Cash transaction limit: Cash cannot withdraw more than Rs 2 lakh in a day.
- Financial year limit: The total withdrawal limit has to be taken care of in the financial year.
Benefits of following the rules of savings account
Following the rules of savings account can have many advantages:
- Income tax department notice prevention: If you follow the rules, you will not get notice from the Income Tax Department.
- Financial transparency: By following the rules, your financial transactions are transparent.
- Legal Safety: By following the rules, you can avoid legal problems.
What to do when you get notice?
If you get a notice from the Income Tax Department, then you have to take the following steps:
- Give correct information: Give details of all your bank payment and also tell where you have received money.
- Evidence of the source: Provide evidence of the source of money deposited.
- Chartered Accountant’s advice: If you are uncertain about the notice, it can be beneficial to seek advice from a chartered accountant.
Important things about savings account rules
There are some important things about the rules of savings account which should be taken care of:
- Financial Year: Financial year from 1 April to 31 March.
- Bank reporting: The bank reports to the Income Tax Department on the deposit of more than Rs 10 lakh.
- Cash transaction limit: Can not do more than Rs 2 lakh cash transactions in a day.
Importance of savings account rules
It is necessary to understand the importance of savings account rules:
- Financial stability: Following the rules keeps your financial stability.
- Legal Safety: By following the rules, you can avoid legal problems.
- Transparency: By following rules, your financial transactions are transparent.
Questions often asked about the rules of savings account
There are some common questions about the rules of savings account which are important to know the answers:
- Can I deposit more than Rs 50,000 in a day?
- Yes, but for this you have to give your PAN number.
- Can I withdraw more than 2 lakh rupees in a day?
- No, it cannot do more cash withdrawal than the limit.
- Can I get a notice on depositing more than Rs 10 lakh?
- Yes, if you deposit more than Rs 10 lakh, then you can get a notice from the Income Tax Department.
Important information about the rules of savings account
There is some important information about the rules of savings account which should be taken care of:
- Financial year limit: Total deposits and withdrawal limits have to be taken care of in the financial year.
- Bank reporting: The bank reports to the Income Tax Department on the deposit of more than Rs 10 lakh.
- Cash transaction limit: Can not do more than Rs 2 lakh cash transactions in a day.
Suggestions for following the rules of savings account
There are some suggestions for following the rules of savings account:
- Check your account regularly: Check your savings account regularly so that you stay within the prescribed limit.
- Give correct information: Give details of all your bank payment and also tell where you have received money.
- Consult a chartered accountant: If you are uncertain about the notice, it can be beneficial to seek advice from a chartered accountant.
Conclusions about the rules of savings account
It is important to follow the rules of savings account so that you can avoid the notices and other procedures of the Income Tax Department. Following the rules makes your financial transactions transparent and you can avoid legal problems.
Disclaimer: This article is only to provide information and should not be taken as any financial advice. For more information about savings account rules, you should contact your bank or chartered accountant. The scheme is real and applicable in India, but the rules keep changing from time to time, so it is important to investigate from official sources for updated information.
Source: https://thechopal.com/business/savings-ecount-ed- deepositing-nd-withdrawing-money/cid16331728.htm
