Bank Cash Deposit Limit: How much cash can you deposit in your bank account? Income tax notice may come! know the rules

If you are thinking of depositing a large amount of cash in your bank account, then stop and read this carefully first. Before doing this, it is very important to understand the rules of the Income Tax Department. Actually, banks give information about cash deposits beyond a certain limit to the Income Tax Department. In such a situation, if you are not able to tell the correct and legal source of the deposited money, then the department can send you a notice and ask for an answer.

How many cash deposits can a notice come on?

According to income tax rules, if a person deposits Rs 10 lakh or more in his savings account in a financial year (between April 1 and March 31), then the bank submits its report to the Income Tax Department. At the same time, this limit for current account has been fixed at Rs 50 lakh. If you deposit more cash than these limits, then this transaction comes under the radar.

Is notice sent in every case?

No, it is not like that at all. Depositing cash more than the prescribed limit does not mean that everyone will receive a notice. If your earnings, your Income Tax Return (ITR) and the source of the deposited money are completely legal, then there is no need to worry. Problems arise when there is a huge difference between your declared annual income and the cash deposited in the bank, or the source of the money is not clear. Only in such a situation does the Income Tax Department ask for clarification from you.

When does PAN card become necessary?

It is mandatory to provide PAN card while depositing large amount in the bank. This makes it easier for the Income Tax Department to track your transaction records. If someone does not have a PAN card, then he has to submit Form-60 or other necessary documents as per the rules.

What to do if notice comes?

Even if for some reason you get a notice from the Income Tax Department, there is no need to panic.

• First of all, read the notice completely with a cool mind and understand what information the department has asked for.
• Answer it within the stipulated time limit.
• Along with your answer, attach documents to prove your claims such as bank statements, source of income, record of any business sale or evidence of money related to will/gift.
• If you have correct and clear accounts of money, then you have nothing to worry about.

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