There was a time when people were overly dependent on traditional banking. Whenever banks were announced to remain closed for several consecutive days due to official holidays or strikes, long queues of people would form in banks to withdraw money. People would stand in line outside for hours. But, with the increase in the trend of digital banking, people's traditional dependence has reduced. According to a report, more than 80 per cent of people (adults) in the country are connected to the banking system. Due to this, everyone has started keeping money in banks because people trust them. It has also become easier for the government to provide facilities to the public. Not only is your money safe in the bank account, but you also get interest. Many times people put their savings worth lakhs in savings accounts. In such a situation, you should know how much money you can keep in the savings account so that you do not come under the radar of the Income Tax Department.
Savings account limit
There is no limit to keeping money in a savings account. You can deposit as much money as you want in it. But, if the amount deposited in your account comes under the purview of income tax, then you will have to give official information about it. Besides, the source of income will also have to be mentioned. If you deposit more than Rs 10 lakh in a bank in a financial year, then it is necessary to inform to the Central Board of Direct Taxes (CBDT). The same limit also applies to cash deposits in FD, investments in mutual funds, bonds and shares.
What if the source of money is not disclosed?
If you deposited more than Rs 10 lakh in your accounts, the Income Tax Department can ask its source. If they are not satisfied with your answer, they can also investigate. If you are caught during the investigation, you may face a heavy fine. The Income Tax Department can impose a 60 per cent tax, 25 per cent surcharge and 4 per cent cess on the deposited amount.
Is it right to keep money in a savings account?
There is no point in keeping a huge amount in a savings account. You can invest this money in various investment tools including the stock market or mutual funds, in which you can get good returns. If you do not want to take risks or want to keep the money in the bank, then you can make a fixed deposit (FD). You will also be safe in this and you will also get good returns on it.
