Savings account rules: Common people are not aware of many rules related to savings account and later they have to face income tax notice. In such a situation, it is better that they know about it beforehand.
Savings account rules: Have you ever wondered how much money you can deposit in your savings bank account in a business year? There is a provision for this under the tax law, in which you can get a notice from the tax department for depositing more than the prescribed limit during a business year. This limit is up to Rs 10 lakh. You may have to pay tax on deposits of more than Rs 10 lakh in a savings account between April 1 and March 31 in a business year.
If you deposit more than Rs 10 lakh, then it is mandatory to inform the Income Tax Department about this. This limit is not only for one savings account, but for all your savings accounts. Banks themselves disclose the details of such transactions at their level.
What will happen on deposits of more than Rs 10 lakh?
Deposits of more than Rs 10 lakh are considered high-value transactions. In such a situation, banks or financial institutions give information about such deposits to the Income Tax Department under the tax law. It is also mandatory to provide PAN on deposits of Rs 50,000 in a day. If someone does not have a PAN, then they have to submit Form 60/61.
What will happen to the interest received on deposits?
Let us also tell you that if you earn more than Rs 10,000 interest on bank deposits in a business year, then tax is levied on it on the basis of the fixed slab. If the interest received from bank deposits in a business year is less than Rs 10,000, then tax exemption can be obtained under Section 80TTA of the Income Tax Act. Senior citizens can get tax exemption on interest up to Rs 50,000 under section 80TTB. To calculate this limit, you have to add the interest earned on deposits in all your bank accounts.
What to do if you get such a notice from the tax department?
If you receive a notice from the Income Tax Department regarding a high-value transaction, first of all you will have to provide sufficient evidence for it. Bank statements, investment records and inheritance documents may be required. It would be better for you to consult a certified tax advisor on this.
As far as transactions in cash are concerned, under section 269ST, no person can transact more than Rs 2 lakh with anyone at one time in a day.
