The income tax regulations in India encompass various cash deposit and transaction limits that individuals and businesses must adhere to, aimed at ensuring financial transparency. Here are some key thresholds and rules concerning cash transactions:
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- Cash Deposit Limit in Savings Account
- Current Account Deposit Limit
- Fixed Account Deposit Limit
- Credit Card Bill Payment Limit
- Stocks, Mutual Funds, Bonds, or Debentures Investment Limit
- PAN Card Requirement Rules
- Cash Transaction Limit
- Cash Gift Limit
- Health Insurance Premium Rule
- Cash Loan Limit
- Real Estate Sales Rules
- Property Transaction Cash Limit
- Expenditure Claim Rule for Self-Employed Individuals
Cash Deposit Limit in Savings Account
- The RBI has set the cash deposit limit for savings accounts at ₹1 lakh per day.
- The annual limit for cash deposits in a savings account is ₹10 lakh.
Current Account Deposit Limit
- While current accounts are typically used for high-value business transactions, there's a deposit limit of ₹50 lakh.
- Violating this limit may lead to notices from the Income Tax (IT) department.
Fixed Account Deposit Limit
- Cash deposits in fixed accounts are subject to a maximum ceiling of ₹10 lakh.
- However, higher amounts can be invested in fixed deposits (FDs) through internet banking and cheques.
Credit Card Bill Payment Limit
- The cash transaction limit for paying credit card bills is ₹1 lakh.
- Payments exceeding ₹10 lakh in a year must be disclosed to the IT department while filing Income Tax Returns (ITR).
Stocks, Mutual Funds, Bonds, or Debentures Investment Limit
- Investments in shares, bonds, mutual funds, or debentures should not exceed ₹10 lakh annually.
PAN Card Requirement Rules
- Transactions exceeding ₹50,000 in a day or ₹20 lakh in a year require a PAN card.
- Individuals without a PAN must apply at least seven days prior to making such cash transactions.
Cash Transaction Limit
- Cash transactions over ₹2 lakh in a single transaction are prohibited.
- For larger transactions, alternative payment methods like bank transfers, debit/credit cards, or cheques are recommended.
Cash Gift Limit
- Cash gifts exceeding ₹2 lakh in a day, even to family and friends, are not permitted.
- Receiving such gifts in a single transaction may result in penalties equal to the transaction amount.
Health Insurance Premium Rule
- To claim deductions under Section 80D, health insurance premiums should be paid through non-cash modes like net banking, cheques, or UPI.
Cash Loan Limit
- Cash loans from financial institutions or friends should not exceed ₹20,000.
- Repayments exceeding this limit must be made through net banking or UPI.
Real Estate Sales Rules
- All real estate transactions must be reported to the tax department in Form 26AS.
- Property registrars are mandated to disclose sales and investments exceeding ₹30 lakh related to immovable property.
Property Transaction Cash Limit
- The maximum cash limit for property transactions is ₹20,000, even when an advance is received.
Expenditure Claim Rule for Self-Employed Individuals
- Self-employed individuals cannot claim expenditure exceeding ₹10,000 in a single day if paid in cash.
- However, the transportation expenditure limit is ₹35,000.
