Here it is not necessary that only Rs 10 lakh be deposited or withdrawn in a lump sum from the savings account in a year. If even a few lakh rupees are deposited up to Rs 10 lakh or a total of Rs 10 lakh is withdrawn one by one, then the chances of getting a notice increase. Let us know about it in detail.
This is a common question that most people raise. People want to know how many savings accounts they can operate simultaneously so that they do not face any problem with income tax.
The second question is what is the maximum balance that can be kept in the savings account so that income tax notice is not received. There are many such misconceptions in the minds of taxpayers regarding savings bank accounts, which need to be removed in time.
The answer to this is very simple. There is no rule in Income Tax that states the maximum number of savings accounts you can keep without getting a notice. That means income tax has nothing to do with savings account. You can maintain and operate as many accounts as you wish.
There is no limit on the maximum amount that can be kept in the account which is related to income tax. You can keep as much money as you want. The actual rules of income tax apply to transactions. That is, how much money and where do you spend from your savings account. Whether you do it in cash or through credit-debit card, these things are taken into consideration.
Pay attention to cash transactions
If you want to avoid income tax notice, you will have to keep an eye on cash transactions. If you pay attention to this, you will be able to avoid income tax action. You have to keep in mind that you should not do more than 10 lakh transactions in a year. Neither can you withdraw more than Rs 10 lakh nor can you deposit more than Rs 10 lakh in that savings account. If you break this rule, you may come under the ambit of income tax notice.
Here it is not necessary that only Rs 10 lakh be deposited or withdrawn in a lump sum from the savings account in a year. If even a few lakh rupees are deposited up to Rs 10 lakh or a total of Rs 10 lakh is withdrawn one by one, then the possibility of notice increases.
If you cross the limit of Rs 10 lakh then income tax action is possible, no one can save you from this. This is the rule for savings bank account. The most important rule is that a single transaction should not exceed Rs 2 lakh and the total transaction in a year should not exceed Rs 10 lakh. If this rule is broken then income tax action will be taken.
How much money to withdraw and deposit
Now the question is that if you do transactions of more than Rs 10 lakh in a year or more than Rs 2 lakh at a time, then how does the Income Tax come to know about it? If your PAN is linked to a bank account and you withdraw or deposit more than Rs 10 lakh from your savings account, then the Income Tax Department will get this information through PAN.
If PAN is not linked, then the bank in which you deposit or withdraw more than Rs 10 lakh, gives information to the Income Tax Department. Cooperative Bank and Post Master General have also been appointed to provide information to the Tax Department. Money can be deposited or withdrawn through cooperative bank or post office. Therefore, Cooperative Bank and Post Master General also have the right to provide information.
Current account rule
If a person spends more than Rs 10 lakh in cash in a financial year for buying bank drafts or taking pay orders, he can get a notice. Action can also be taken if you spend more than Rs 10 lakh in a financial year to buy a product which has been given the status of prepaid instrument by the Reserve Bank.
Similar rules apply for current account also but the transaction limit has been kept at Rs 50 lakh. You cannot deposit more than Rs 50 lakh in a current account or withdraw more than Rs 50 lakh in a year. This work cannot be done even by cheque.