New Delhi. In today’s time, every person definitely has a Savings Account, whether he is employed, businessman or other. Annual interest is also given by the bank on these savings accounts. This interest rate is different for all banks. Generally, there is no limit on the amount deposited in the savings account, but have you ever thought how much money you can put or withdraw in a savings account in a financial year so that you do not come under the tax net?
Income tax would be monitored on such accounts
Under the tax laws, banking companies are required to inform the tax department of accounts in which ten lakh rupees or more have been deposited or withdrawn on a regular basis during the current financial year. This limit is seen in aggregate for cash deposits of ten lakh rupees or more in a financial year in one or more accounts (other than current accounts and time deposits) of the taxpayer.
Must be aware of Income Tax Rule 114EIn current account, this limit is Rs 50 lakh and above. However, apart from the transactions, there are also some other transactions about which you need to be aware. Kapil Rana, founder and chairman of Hostbook Limited, says that a person should be aware of Rule 114E of Income Tax regarding the income expenditure made from the account. So that he withdraws or deposits the same amount from his savings account in a financial year so that he does not come under the radar of income tax.
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1. Banking Regulation Act 1949 is applicable to every banking company or co-operative bank that provides the facility of bank account. They are required to report the following transactions related to bank accounts
One or two accounts (excluding current and time deposits) in which an amount of ten lakh rupees or more is deposited in a financial year.
ten lakh or more in cash collection in a financial year for purchase of prepaid instruments, bank drafts, pay orders, banker’s cheques, prepaid instruments issued by the Reserve Bank of India under section 18 of the Payment and Settlement Systems Act 2007 .
2. The banking company issuing the credit card or a co-operative bank to which the Banking Regulation Act, 1949 is applicable or any other company or institution is required to report the following transactions
Cash payment of one lakh or more in a financial year against the bills of one or more credit cards issued
10 lakh or more by any mode against the bills of one or more credit cards issued.
3. A company or entity issuing bonds or debentures is required to report a receipt from any person for an amount of ten lakh rupees or more for receiving bonds or debentures issued by the company or institution in any financial year. Bonds or debentures issued by the company (excluding the amount received on account of renewal).
4. Where the company is issuing shares, it is necessary to report an amount of ten lakh rupees or more in any financial year to receive the shares issued by the company.
5. Under Section 68 of the Companies Act 2013, a company listed on a recognized stock exchange and purchase of its securities is required to report from any person buyback of shares of an amount of ten lakhs or more in any financial year.
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6. A mutual fund’s trustee or other person managing the affairs of the mutual fund shall receive a report of receipt from any person for an amount of ten lakhs or more in a financial year for receiving units of one or more schemes of the mutual fund. (excluding the amount received on account of transfer from one scheme to another mutual fund).
7. An authorized person referred to in clause (c) of section 2 of the Foreign Exchange Management Act 1999 is required to report receipts from any person amounting to ten lakhs or more in a financial year for the sale of foreign currency.
8. The Inspector General appointed under section 6 of the Registration Act 1908 or the Registrar or the Deputy Registrar appointed under section 6 of that Act is required to report the purchase or sale of immovable property of Rs 30 lakh or more by any person.
Thus, before crediting or withdrawing any amount in a bank account, we must ensure that in compliance with the applicable provisions, we should not come under the ambit of such transactions which would be subject to your tax u/s 114E. could.