It's crucial to manage your savings account within specific bounds to keep the Income Tax Department from becoming involved. The following outlines the regulations pertaining to cash deposits and withdrawals:
 
Important Guidelines for Savings Account Cash Transactions
 
Limit on Cash Deposits and Withdrawals
 
• During a single fiscal year, which runs from april 1 to march 31, the total amount of money deposited or taken out of your savings account should not surpass ₹10 lakh.
•  Your bank will notify the Income Tax Department of the transaction if you go above this cap.
 
Limit on Cash Transactions Per Day
 
• The Income Tax Act's Section 269ST prohibits taking out more than ₹2 lakh in cash from an individual in a single transaction or several linked transactions in a single day.

High-Value Deals
 
•  The bank must notify the Income Tax Department of all high-value transactions, such as deposits above ₹10 lakh, made during a fiscal year.
•  Additionally, if you make a cash deposit of ₹50,000 or more in a single day, banks must disclose it and you must give your PAN number.
•  Form 60 or Form 61 must be submitted in lieu of a PAN if you do not have one.

Notification from the Income Tax Department
 
The Income Tax Department will be informed if your savings account activity above certain caps, and you can be requested to provide proof of the funds' origin.
 
How to Respond to an Income Tax Notice
 
Make sure you have the following paperwork to back up your claim if the Income Tax Department sends you a notification about high-value transactions:
 
• Clear records of deposits and withdrawals are provided by bank statements.
•  Investment Records: Provide proof of any investments made using the money that was deposited.
•  Records Associated with Inheritance: Provide proof of inheritance if the funds were received that way.

To manage the matter properly, it is best to speak with a tax professional if you are unclear about how to react or worried about where your money is coming from.
 
You may handle your savings account activities without running the danger of receiving an income tax notice if you remain mindful of these guidelines and restrictions.
 
 
 
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Income Tax

SIBY JEYYA

16/12/2024 11:11 AM