Income Tax Update: What is the limit for keeping money in a bank account, when does the income tax notice come, know the rules

News, Digital Desk- ( Income tax rule) This question must have come to your mind that how much money can be kept in a savings account and how much cash can be withdrawn in a day. 

Today we will answer both these questions in this news. According to personal finance experts, under income tax rules, the total cash deposit or withdrawal in a savings account in a financial year should not exceed Rs 10 lakh.

Additionally, under section 269ST, you cannot withdraw Rs 2 lakh or more in cash from any one person in a single day, in a single transaction, or in a transaction linked to an event. 

Additionally, banks must notify the income tax department if the total cash deposits across all your savings accounts exceed Rs 10 lakh in a financial year (April 1 - March 31), even if it is spread across multiple accounts.

High value transactions-

Now the question is, what will happen if more than Rs 10 lakh cash comes into your savings account in a financial year? Any amount above this limit will be considered a high value transaction. 

Banks or financial institutions will have to inform the Income Tax Department about this under Section 114B of the Income Tax Act, 1962. 

Apart from this, you will have to provide PAN number to deposit more than Rs 50 thousand in a day. If you do not have a PAN, then you will have to submit Form 60/61 as an alternative.

How to respond to income tax notice?

To respond to an income tax notice related to high value transactions, you must have sufficient evidence to support your claim regarding the source of funds. 

These can be bank statements, investment records and inheritance documents. If you are unsure or concerned about the source of cash, you can consult a tax advisor.