Depositing large amounts of cash into your bank account?

Priya Vishwakarma

Sep 16,2024

While there are no restrictions on depositing or withdrawing large amounts through cheques or online transactions, cash deposits and withdrawals at a bank branch do have limits.

How much money can you keep in your account?

Hiding Pre-Existing Conditions

One of the biggest mistakes is not disclosing pre-existing conditions, family medical history, or habits like smoking or drinking. 

How much cash can you deposit?

If you deposit Rs 50,000 or more in cash, you must provide your PAN number. You can deposit up to Rs 1 lakh in cash per day. If you don’t make regular cash deposits, this limit can increase to Rs 2.50 lakh.

Overall, you can deposit a maximum of Rs 10 lakh in cash into your account in a financial year, regardless of how many accounts you have.

What happens if you exceed these limits?

If you deposit more than Rs 10 lakh in cash in a financial year, the bank is required to report this to the Income Tax Department. You will need to explain the source of this income.

Failure to provide satisfactory details can lead to an investigation by the Income Tax Department, and you could face significant penalties.

Potential Penalties

If you deposit more than Rs 10 lakh in cash and cannot provide evidence of the source of the funds, you could face a tax of 60 per cent on the deposited amount, along with a 25 per cent surcharge and a 4 per cent cess.

However, if you have proof of the source of your funds, you can deposit large amounts of cash without concern

For better returns, consider investing large sums in fixed deposits or other investment avenues rather than keeping them in a savings account.