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Before depositing or withdrawing any amount from the bank account, we must ensure that while complying with the applicable provisions, we are not responsible for incurring such transaction which may expose you to tax under Rule 114E. Please let us know about it in detail.

To meet their banking needs, people working in any sector, including salaried people, must have at least one savings account, although many people maintain more than one account for various reasons. Stable income is where people usually open a savings bank account because here they also earn some interest on the balance amount. Although there is no general limit on the amount of money that can be deposited in a savings account, have you ever wondered how much money you can deposit or withdraw from a savings account in a financial year so that it comes under the tax net? Shouldn’t I come?

Tax experts say that to curb black money, the government has made it mandatory for banks, companies, post offices and non-banking financial companies to submit Financial Reporting (SFT) statements when transactions in savings account exceed the specified amount. This includes depositing or withdrawing cash, investing in stocks, mutual funds, credit card expenses, purchasing foreign currencies, real estate transactions etc.

Keep an eye on such accounts

Under tax laws, banking companies are required to submit information to the tax department during the current year about those accounts in which Rs ten lakh or more have been deposited or withdrawn on a regular basis during the year. This is an aggregate limit for cash deposits of Rs 10 lakh or more in a financial year in one or more accounts (other than current accounts and term deposits) of the taxpayer. It helps the tax officer to ascertain the sources of funds, nature of receipts and whether the taxpayer has paid proper taxes or not, said Aarti Raut, partner, Deloitte India.

You should be familiar with Income Tax Rule 114E

Hence, it is necessary to inform the tax authorities about cash deposits and withdrawals of Rs 10 lakh or more in a bank account during a financial year, so in such a situation, if there is a transaction of Rs 10 lakh or more in your account, then you need to be careful. This limit in current account is Rs 50 lakh and above. However, apart from the transaction, there are some other transactions as well that you should be aware of. Kapil Rana, Founder and Chairman, Hastebook Limited, says that one should be aware of Income Tax Rule 114E regarding income and expenditure made from accounts. So he can withdraw or deposit only that amount of money from his savings account in a financial year so as not to fall under the income tax radar. Because transactions in excess of that are reportable under Rule 114E of the Income Tax Section of 1962.

The Banking Regulation Act, 1949 applies to every banking company or cooperative bank that provides bank account facilities. They are required to report the following transactions related to bank accounts –

• Except for one or two accounts (current deposits and term deposits) an amount of Rs 10 lakh or more is deposited in a financial year.
• Ten lakh or more were paid for cash collection in a financial year for the purchase of bank drafts, payment orders, banker’s checks and prepaid instruments issued by the Reserve Bank of India under Section 18 of the Payment and Settlement Systems Act, 2007.

The credit card issuing banking company, a cooperative bank to which the Banking Regulation Act 1949 applies or any other company or institution is required to report the following transactions –

• Making a cash payment of one thousand or more in a financial year against one or more credit card bills issued
• Paying an amount of ten thousand or more in any way against one or more credit card bills issued.

A company or institution issuing bonds or debentures is required to report receipt from any person of an amount of Rs ten thousand or more for receipt of bonds or debentures issued by the company or debentures in any financial year. Bonds or debentures issued by the company (excluding the amount received on replenishment account).

If the company is issuing shares, it is necessary to report an amount of Rs ten lakh or more in any financial year to receive shares issued by the company.

Under Section 68 of the Companies Act, 2013, a company listed on a recognized stock exchange has to report purchase of shares worth Rs 10 lakh or more from any person in a financial year.

The trustee of a mutual fund or any other person managing the affairs of the mutual fund must report the receipt of Rs ten lakh or more from any person in a financial year for units in one or more mutual fund schemes. (Except for the amount received due to transfer from one scheme to another investment fund).

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 thousand rupees or more in a financial year for the sale of foreign exchange.

The Inspector General appointed under Section 6 of the Registration Act, 1908 or the Registrar or Sub-Registrar appointed under Section 6 of this Act is required to report any purchase or sale of immovable property worth Rs 30 lakh or more by any person.

Therefore, before depositing or withdrawing any amount from the bank account, we have to ensure that while complying with the applicable provisions, we are not liable to pay taxes under Rule 114E. could.

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