Copyright informalnewz
Cash withdrawal limit for Savings Account: If you repeatedly withdraw cash above the limit, the bank goes into alert mode and reports it to the Income Tax Department. If the transaction doesn’t match your income or the source isn’t clear, the tax department may send a notice. Income Tax Rules for Savings Accounts: If you frequently withdraw cash from your savings account, be cautious. These days, the Income Tax Department is closely monitoring bank transactions. If large amounts are withdrawn from your account repeatedly or cash flow suddenly increases, your information may reach the Income Tax Department directly. In such a situation, you may receive an Income Tax notice. People often think that withdrawing money from a savings account is irrelevant, but this is no longer the case. Banks report every large cash transaction directly to the tax department. If something suspicious appears in that report, Income Tax officials may seek an explanation from the account holder. What are the rules for cash withdrawals from banks? Each bank has its own cash withdrawal limit. For example, HDFC Bank offers free cash withdrawals of up to ₹1 lakh per month. After four free transactions, a ₹150 charge is levied on each withdrawal. If you repeatedly withdraw cash above the limit, the bank goes into alert mode and reports it to the Income Tax Department. If the transactions don’t match your income or the source isn’t clear, the tax department may send a notice. What does an Income Tax Notice mean? If the Income Tax Department determines that the cash flow in and out of your account is disproportionate to your income, they may ask you for the source of the transaction. If you fail to provide a valid answer or fail to provide supporting documents, you could face penalties. Therefore, be sure to keep a record of every transaction in and out of your bank account. Could an Income Tax Notice be issued for cash deposits? The Tax Department monitors not only cash withdrawals but also large deposits in savings accounts. If you deposited ₹10 lakh or more in cash in your savings account between April 1 and March 31 of a financial year, the bank will report this to the Income Tax Department. In such cases, the department examines your income and expenses. If there is a discrepancy between your income and bank transactions, an Income Tax Notice may be sent. How to avoid an income tax notice? Keep a record of every transaction.Before depositing or withdrawing large amounts, ensure the source is clear.If the money comes from business or a transaction, keep proof of it.Be sure to consult your bank or tax advisor when making transactions. In today’s digital age, the Income Tax Department has information about every transaction. Therefore, if you frequently withdraw or deposit large amounts, be cautious. If you follow the rules regarding cash withdrawals and deposits, there will be no problems, but even accidentally concealing a transaction can be costly. Read More: BSNL is offering 2GB data per day, unlimited calling, and a free SIM to senior citizens.
