Consumer banking alert! Have Savings Account? Know how much balance is tax-free, check details

Almost every person has a savings account. But do you know how much balance you can keep in your account which will not be taxed? Account holders should know that banks provide annual interest on the savings account. However, all the banks have different interest rates. 

Few account holders are also not aware of how much money they can keep or withdraw from a savings account in a financial year so that it does not come under tax? Every year banks have to inform the tax department about the customers who withdraw 10 lakh or more than that from the bank. 

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According to the tax law, banks have to provide information about those accounts during the current financial year. This limit is seen in aggregate for cash deposits of Rs 10 lakh or more in a financial year in one or more accounts (other than current accounts and time deposits).

The limit of cash deposit in the current account is Rs 50 thousand or more. Kapil Rana, Founder and Chairman, HostBooks Limited, says that a person should be aware of Rule 114E of Income Tax regarding income and expenditure from the account.

Points to note:

1. All the private and government banks which allow customers to open accounts come under Banking Regulation Act 1949. Such banks are required to inform about the account transactions especially if Rs 10 lakh or more cash is deposited in those accounts (except accounts with current and time deposits) in the financial year.

2. Banking Regulation Act 1949 is also applied to the banks which provide credit card service to the customers. 

People with more than one credit card have to make a cash payment of Rs 1 lakh or more in a financial year against the bill. Also, they will have to pay Rs 10 lakh or more against the bill through any mode.