Income Tax: Know how much balance in the savings account is tax free and how much tax will have to be paid...
Many people in the country have savings accounts. It is very important for such customers to know how much of the balance in their account is taxable and how much is not. Actually, annual interest is given by the bank on the savings account, but all the banks have different interest rates. At the same time, some customers do not know how much money can be deposited or withdrawn from the savings account in a financial year, so that they do not come under the tax net.
The tax department will have to answer
Let us tell you that every year the bank companies have to reply to the Tax Department if the customers withdraw an amount of Rs 10 lakh or more from the bank. Under the tax law, the bank has to give information about those accounts during the current financial year. This limit is seen in aggregate for cash deposits of Rs 10 lakh or more in one or more accounts (other than current accounts and time deposits) of the taxpayer in a financial year.
You can deposit only this much cash
The limit of cash deposits in the current account is Rs 50 thousand or more. Talking about transactions, Kapil Rana, Founder and Chairman of Hostbook Limited, says that a person should be aware of Income Tax Rule 114E regarding the income and expenditure made from the accounts. With this, he can withdraw or deposit only that much money from his savings account in a financial year so that it does not come under the income tax radar.
Keep these things in mind
Whether a bank is private or government, whichever provides the facility to the customers to open an account. Banking Regulation Act 1949 applies to those banks. It is necessary to report account transactions to such banks. Especially except for current and time deposit accounts, Rs 10 lakh or more cash is deposited in those accounts in a financial year.
Whereas under Section 18 of the Payment or Settlement System Act 2007, a financial instrument is issued for the purchase of Bank Draft, Pay Order, Banker Cheque, and Prepaid Instruments issued by RBI. Payment of Rs 10 lakh or more should have been made in cash collection in the year.
Credit card payment
It is necessary to report account transactions to the bank that provides credit card service to the customers and (the Banking Regulation Act 1949) also applies to it or any other company or institution.
Those who have more than one or two credit cards will have to pay Rs 1 lakh or more in cash against the bill in a financial year. Also, payment of Rs 10 lakh or more will have to be made against the bill through any mode.
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