With time the Income-tax department has advanced itself. Now, if you do transactions i.e. deposit or withdraw money above a certain limit in your Savings Bank account, then bank will give this Information to the IT Department. Let's check this out in details.

What is the Cash Deposit or Withdrawal Limit in the Savings Bank Account?

If you do transactions of more than ₹10 Lakh i.e. you can withdraw or deposit the amount more than ₹10 Lakh during a financial year in your Savings Bank Account, then this information will be given to IT Department by your bank.

·       Now, whether you do withdrawal or deposit of ₹10 Lakh in one go or, deposit or withdraw money part by part, in both the cases the information will be given to the IT Department by the bank.

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For instance, if you deposit an amount of ₹2 Lakhs in your Savings Bank Account five times during a financial year, this means the limit of ₹10 Lakh is crossed, therefore this information will be given to IT Department by your Bank.

·       The same will be done for withdrawal i.e. if you withdraw money above ₹10 Lakh from your Savings Bank Account during a financial year then this information will also be given to the IT Department by your Bank.

For instance, if you withdraw an amount of ₹1 Lakh in your Savings Bank Account ten times during a financial year, this means you have crossed the limit of ₹10 Lakh then your bank will give this information of withdrawal to IT Department.

What if a person has more than one Savings Bank Accounts?

There may be the case that a person have more than one Savings Bank Accounts and if he have done transactions above ₹10 Lakh including all these accounts during a financial year, then this information will also be given to IT Department by your respective banks.

Suppose, you have two Savings Bank Accounts, one in PNB and another in SBI and you have deposited ₹2.5 Lakh two times in both the accounts i.e. you have deposited total amount ₹5 Lakh in PNB and SBI separately. If you observe the limit of ₹10 Lakh is crossed, so this information will also be given by both banks.

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What does the IT Department do with this information?

IT Department will send you a notice, in which they can ask the explanation about the source of Credits above ₹10 Lakh in your Savings Account. So, you have to explain the source.

The IT Department compares the deposits of Savings Accounts with your Income Tax return. If there is less income shown in your ITR and the deposits in Savings Bank account is more, then IT Department will ask the explanation from concerned person regarding the proper source of credits and if a person  has proper source, then he need not worry, just tell them the source, but that source should be legitimate, but if a person is failed to explain, then it will be considered as his income and considered as Unexplained Cash Credit and he has to give the income tax at a rate of flat 60%.


Suppose, a person has shown an ITR of ₹2.5 Lakh and fill Nil ITR i.e. tax is zero but ₹15 Lakh is deposited in his Savings Bank Account during a financial year. Now, this information has gone to the IT Department and it has sent the notice to the concerned person for the explanation. If a person has a proper source of it then he need not worry, just tell them the legitimate source and if this person couldn’t explain them properly about the source of this ₹15 Lakh, then IT Department will consider this amount as his income and this is called Unexplained Cash Credit, in terms of Income-tax. This person has to give income tax returns at a rate of 60%.

Some Special Cases

Case I

Sometimes, you may take the money in your account to help someone.

Suppose, some of your relatives live in another state and have to give money to a person living in your state, he may send money in your account and you simply give money to the concerned person. In this case, if the limit is crossed, then the IT Department will ask you for the source and if you reply that money was sent to you by your relative, then IT Department will ask the source of money from them. If they tell the proper source of money, then need not worry but if they aren’t able to satisfy the IT Department, then this amount will be considered yours Unexplained Cash Credit and you will be charged an income tax at a rate of flat 60%.

Case II

Suppose you have taken a loan from a relative, then you have the explanation that you have taken this amount as a loan but in this case, your relative should also have the explanation that from where the loan amount has come and he should agree that he has given you the loan because if he disagrees or he couldn’t explain the source of money, then this will be considered as your Unexplained Cash Credit and you charge an income tax at rate of flat 60%.

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So, you need to be alert while doing transactions. When you transact in your savings accounts, including all savings accounts, do not cross the limit of 10 Lakh during one financial year until you don’t have its proper explanation.

I hope you have got the idea that how much amount should you deposit in your savings bank account. Do not deposit more than 10 Lakh in a financial year.


IT Department can also check transactions less than 10 Lakh as your Savings Account is linked to your adhaar card or PAN Card, so you can’t hide any information. So, transact in your savings bank account inline with your ITR. The salaried person should pay special attention to this.

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