Updated Rules for Large Cash Deposits: The Indian government has changed its rules regarding large cash deposits in savings accounts to foster financial transparency and discourage illicit transactions. As digital payments gain more popularity, governments are ensuring that regulations for following large cash flows are more stringent. These rules are to be understood as individuals and institutions need to be on the same page and not penalised.
The maximum amount of cash deposit allowed in a savings account is ₹10 lakh in a year. Any amount of cash deposit in excess of the amount goes straight to the Income Tax Department as a report. Also, the maximum daily limit of ₹2 lakh needs to be kept in mind, so that the large-scale transactions are not noticed.
Deposits over ₹50,000 in one go now need the individual to provide their Permanent Account Number (PAN) to perform so. The policy steps up controls over monitoring and avoids tax dodging so that all large deposits are reported.
Withdrawals are being taxed under Section 194N of the Income Tax Act:
If an individual withdraws ₹1 crore and above within a financial year, a 2% TDS is levied.
Individuals who have been defaulting on submitting their income tax returns for three years will be asked to pay a 2% TDS on withdrawals ranging from ₹20 lakh up to ₹1 crore.
Withdrawals of more than ₹1 crore for non-filers will have a 5% TDS, meeting the taxation requirement.
Banks need to report cash transactions of more than ₹2 lakh to the tax authorities on Form 61A in order to validate deposits according to legal financial transactions. In addition, no person may receive ₹2 lakh or more in cash through a single transaction or chain of transactions in the financial year under Section 269ST, curbing unaccounted cash flows.
Also Read: New Birth Certificate Rules in India: What Every Citizen Needs to Know
Updated Rules for Large Cash Deposits in Savings Accounts (2025) will help you navigate easily. Through strict financial provisions, individuals are forced to remain informed of changing deposit. And withdrawal rules so that legal problems do not emerge. With banking legislations trying to drive individuals towards cashless transactions, adhering to such provisions will make economic activity smooth and yet keep the country in line with tax directives. Such provisions also work to India’s advantage in its drive towards financial transparency and accountability.
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