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Guide to the Cash Deposit Limit in a Savings Account
You just received a hefty sum of cash and need to deposit it in your bank account. You stroll into the bank, approach the counter, and prepare to deposit the cash. But then, the teller mentions something unexpected about a “cash deposit limit.” You are taken aback—what exactly is this limit, and what happens if you go over it? These limits aren’t just random numbers; the government sets them and the banks to monitor transactions, ensure transparency, and prevent illicit activities.
Cash deposit limit in Savings Account explained
Depositing funds into your Savings Account is an essential step towards building savings securely. Besides bank transfers and depositing cheques, deposits in the form of cash are another way to increase your bank balance. Rather than keeping cash stored at home, depositing it into your savings account is prudent. A cash deposit limit refers to the maximum amount of funds you can deposit into your account in one day.
Also Read: 6 things to consider before opening a Savings Account
Cash deposit limit in your Savings Account
If you are wondering how much cash can be deposited in your Savings Account, you are in the right place. As per the Reserve Bank of India (RBI) guidelines, you can deposit up to ₹50,000 into your Savings Account without furnishing your PAN card details. However, if you want to deposit a higher amount, you will need to provide your PAN card details.
The cash limit set per day, per transaction, and from one person is ₹2 lakhs. On the other hand, the cash deposit limit in a Savings Account per financial year is set at ₹10 lakhs. Your bank will report a transaction that exceeds this limit to Income Tax authorities.
Also Read: Savings Account uses you might not know about
Tax rules for cash deposits in your bank account
The Reserve Bank of India imposes a limit on Savings Account deposits, capping them at ₹10 lakh each fiscal year. Depositing more than this can trigger a notification from the Income Tax Department to examine your transactions, though these amounts are not subjected to direct taxation.
You will need to file your returns, clearly mention your source of income, and pay taxes as per the relevant income bracket. If you are unable to verify the source of funds, then the Income Tax Department, under Section 68 of the Income Tax Act, can impose a 60% tax, plus a 25% surcharge and a 4% cess on the deposited amount.
Rules for cash deposits in Savings Account
Here is a quick summary of the rules for your Savings Account maximum deposit:
- For cash deposits under ₹50,000, providing your PAN card details to the bank is not necessary.
- However, for any deposit exceeding ₹50,000, you must supply your PAN card information.
- Suppose you make a maximum deposit in a Savings Account of ₹2 lakhs or more in a single transaction, in aggregate from a single person, or in a day. Under Section 269ST, a 100% penalty is applied.
- The maximum amount in your Savings Account you can deposit in cash per year is ₹10 lakhs.
Rules for large deposits in Savings Accounts
If you make a cash deposit of ₹10 lakhs and above in a financial year, then in all probability, your bank may notify the Income Tax authorities. In such a case, you may receive a notice from the IT department, which will want to know the source of the income. You will need to declare the source of funds when filing your returns, and you will be taxed as per your income bracket.
Other cash transaction limits
The cash withdrawal limit of a Savings Account per day varies from bank to bank. Typically, a more premium account allows you to withdraw a higher limit. Your bank may also have a monthly withdrawal limit. Be sure to know the rules well when choosing the right Savings Account for you.
Also Read: 10 benefits of opening an Axis Bank Digital Savings Account
Conclusion
It’s essential to know the various rules that apply to any financial product, from maximum deposit in a Savings Account to cash withdrawal limits. Axis Bank offers a spectrum of Savings Accounts to suit every income, lifestyle and profile. You can activate your account with a paperless onboarding process and a seamless video Know Your Customer (KYC) process. Access a Debit Card , other services, a rewards programme, and exclusive deals with your Axis Bank Savings Account.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision
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