iWhat happens if I receive 10 lakh in my savings account?
Managing finances in accordance with the law is a crucial task to which we should pay attention always. Do you know, that you can’t put all the money you earn in your savings bank account if it exceeds 10 lakh per annum? Technically you can, but you’ll attract income tax authorities and 60% tax, plus a 25% surcharge and a 4% cess on the deposited amount if you are unable to verify the source of the money.
As per the guidelines RBI, the upper cap for the deposit in a savings account in a financial year is Rs.10 lakhs. If you deposit more than the amount, you may receive a notice from the Income Tax Department. And then, you will have to file your taxes, be clear about where your money comes from, and pay the right amount of taxes for your income.
Let’s clear this with an example. For instance, if the deposit limit for a savings account is Rs. 10 lakhs per financial year, and your salary is Rs. 1.2 lakhs per month. Putting all of your monthly income of Rs. 1.2 lakhs into savings adds up to Rs. 14.4 lakhs over the course of a financial year, which is 12 months. This is more than the Rs. 10 lakhs deposit cap. Because you have more than 10 lakhs in deposits in a financial year, you may have to pay taxes or be limited in how much you can put in the future.
You may need to look into other options to stay within the deposit limit. For example, you could open more bank accounts, spend extra money in fixed deposits or mutual funds, or pay for things with the money instead of putting it in your savings account.
Here financial literacy and strategic financial planning take place. Wiser decisions can save more money lower the tax deduction. That’s why you need an expert’s help and advice; or you can simply hire an accounting and auditing firm like CA Near By Me to get A to Z financial management needs.
