₹10 Lakh Cash Rule: What happens if your savings account crosses this mark? Here’s what you need to know.

Having more than ₹10 lakh in your savings account is not illegal and does not automatically mean you have to pay tax.

The ₹10 lakh figure mainly relates to cash deposits made into savings and certain other eligible accounts during a financial year.

If total cash deposits in your eligible savings accounts reach ₹10 lakh or more in a financial year, banks may report the transaction under SFT rules.

Cash deposits across multiple eligible savings accounts can be aggregated for the reporting threshold.

Reporting by the bank does not automatically mean an income-tax notice or tax liability; the source of the money is important.

If asked, you should be able to explain and support the source of large cash deposits with appropriate documents and records.

Legitimate sources such as business receipts, documented asset sales or other disclosed income should be properly recorded and supported.

Reported financial transactions may be reflected in your Annual Information Statement (AIS) on the Income Tax Department portal.

Avoid unexplained cash deposits, especially when the amounts do not match your declared income or available financial records.

Remember: ₹10 lakh is not a maximum bank-balance limit. The rule concerns reportable cash transactions, not simply having ₹10 lakh in your account.

Before making large cash transactions, maintain proper records and check the latest Income Tax Department rules or consult a qualified tax professional.

Thanks for watching!

Stay updated with the latest in
Education & Careers.