New Delhi. Money in a bank account is not only safe, but interest is also earned on it. In the last few years, a large population in India has been connected to the banking system. The special thing is that there is no limit on opening a savings account in India.
That is, a person can open as many savings accounts as he wants. In such a situation, it is important to know how much money a person can keep in a savings account. That is, you can deposit as much money as you want in a savings account. Yes, it is mandatory to keep a minimum balance in all other savings bank accounts except zero balance accounts.
There may be no limit on keeping money in a savings account, but if you deposit more than Rs 10 lakh in a financial year, then the bank informs the Central Board of Direct Taxes (CBDT). The same rule applies to cash deposits in FDs, investments in mutual funds, bonds, and shares.
You may have to pay tax on interest.
According to a report by Live Mint, tax and investment advisor Balwant Jain says that any Indian can keep any amount of money in a savings account. There is no limit set in the Income Tax Act or banking regulations on depositing money in a savings account. The bank account holder has to pay tax on the interest earned on the amount kept in the bank’s savings account.
Also Read: Vande Bharat: Vande Bharat’s first sleeper will run on this route! Know details instantly
The bank deducts 10% TDS on interest. Balwant Jain says that tax has to be paid on interest but, tax deduction can be availed on it too. According to Section 80TTA of the Income Tax Act, all individuals can get tax exemption up to 10 thousand. If the interest is less than 10 thousand rupees, then tax will not have to be paid. Similarly, account holders above 60 years of age do not have to pay tax on interest up to 50 thousand rupees.
Income Tax Department can ask about the source of money
If an account holder deposits more than 10 lakh rupees in a financial year in a savings account, then the Income Tax Department can ask about the source of the money. If not satisfied with the answer from the account holder, then it can also investigate. If the source of money is found to be wrong in the investigation, then the Income Tax Department can impose 60% tax, 25% surcharge, and 4% cess on the deposited amount.
