The limit also applies on withdrawing cash from your account. Government will deduct 5 percent TDS. Now the income tax people are keeping an eye on the savings account.

Do you know that there are certain rules for cash deposit and withdrawal in savings account? If you do not follow these, you may be fined or interrogated. Therefore, it is important that you know about these rules so that you do not make any mistakes.

Rules for depositing and withdrawing cash from savings account

Everyone has a savings account in some bank. All of us women use savings accounts. Your savings account will also be linked to UPI transactions. Many times you may be depositing cash in this account or withdrawing large amounts of money at once. But do you know that there are some rules for this too, which come under the rules of the Income Tax Department. It is important to follow these so that you do not have to face any problem.

Deposit and Withdrawal Rules

As per income tax rules, there is a limit for depositing cash in a savings account. There is a limit on how much cash you can deposit into a bank account in a certain period. This limit is designed to keep an eye on cash transactions to prevent money laundering, tax evasion and other illegal financial activities.

If you deposit Rs 10 lakh or more in a financial year, then you will have to inform the Income Tax Department about it. However, if you have a current account, the limit is Rs 50 lakh. Transactions above these limits are required to be reported by financial institutions to the Income Tax Department.

Rules under section 194A

If you withdraw more than Rs 1 crore from your savings account in a financial year, 2% TDS (Tax Deducted at Source) will be deducted on it. For those who have not been filing ITR (Income Tax Returns) for the last three years, 2% TDS will be deducted even on withdrawals of more than Rs 20 lakh.

If such people withdraw Rs 1 crore in a financial year, 5% TDS will be imposed on them. TDS deducted under section 194N is not classified as income, but you can use it as credit while filing ITR.

Rules under section 269ST

Under Section 269ST of the Income Tax Act, if a person deposits cash of Rs 2 lakh or more in a financial year, he will be penalized. However, this penalty is not applicable for withdrawing money from the bank. But, TDS is deducted on withdrawals beyond a certain limit.