Avoid Excessive Transactions in Savings Account, or You May Draw the Tax Department’s Attention
Business Desk, New Delhi: A savings account is where we store our hard-earned money, but it has certain transactional limits. Exceeding these limits could put you under the scrutiny of the Income Tax Department, a fact many people remain unaware of. Here’s an overview of the rules governing savings accounts under tax laws.
Reporting Required for High Transactions
According to financial experts, the total deposits in a savings account during a financial year should not exceed ₹10 lakh. If this limit is breached, the account holder must inform the Income Tax Department. Similarly, under Section 269ST of the Income Tax Act, a maximum daily transaction limit of ₹2 lakh is permitted. Exceeding this limit requires the account holder to provide reasons to the bank.
Banks Share High-Value Transaction Data
As per regulations, deposits of ₹50,000 or more in a single day must be reported to the bank. The account holder must also provide their PAN details. If PAN is unavailable, submitting Form 60 or 61 is mandatory. Transactions exceeding ₹10 lakh are classified as high-value and are reported by the bank to the Income Tax Department.
What to Do If You Receive a Notice?
Occasionally, large transactions might inadvertently trigger a tax notice. In such cases, it is crucial to respond promptly. Ensure your reply includes all relevant documents, such as bank statements, investment records, or asset details. If you encounter challenges in replying or compiling documents, it is advisable to seek guidance from a financial advisor.
Staying informed about these regulations can help you avoid unnecessary complications and ensure smooth management of your finances.
Read more like this- Hindenburg Research: Why is It Shut Down? Who Is Nathan Anderson? Know All the Details