There is no limit for transactions in a savings account, but if more than a certain amount is deposited in a financial year, the Income Tax gets information about it. The account holder has to give its details to the IT department. Apart from this, the income earned on the savings account is also taxable.
Savings Account Rules: In today’s era, it is necessary for every person, rich or poor, to have a bank account, because money from salary to wages and other government schemes comes directly into the accounts. There are many options available for opening an account in banks like savings, current and salary accounts. However, most people in the country have a savings account.
Most of the transactions in the country are done by the savings account only, but do you know how much money should be kept in a savings account? By the way, there is no limit to the amount of money kept in the savings account. But, if the money deposited in the savings account comes under the purview of income tax, then you will have to give information about it.
According to the Central Board of Direct Taxes, it is mandatory to give information about the amount of more than Rs 10 lakh in a financial year in any bank account. This limit also applies to investments in FDs, mutual funds, bonds and shares.
At the same time, tax has to be paid on the interest received on the savings account as well, but there are some rules related to it. Under the Income Tax Act section 80TTA, no tax is levied on interest up to Rs 10,000 earned in a financial year on a savings account for ordinary people. If the interest amount is more than this, tax has to be paid. However, for senior citizens, this limit is up to Rs 50,000.
Not only this, the interest earned from the savings account is added to your income from other sources and then you have to pay tax on the total income as per the respective tax bracket.
Let us tell you that the country’s leading government and private banks are paying interest ranging from 2.70 percent to 4 percent on the savings account. The interest rate on savings account with balance up to Rs 10 crore is 2.70 per cent and for the amount above Rs 10 crore, this rate is 3 per cent. Apart from this, many small finance banks are giving up to 7% interest on savings account with conditions.
