New Delhi, April 5, 2025 — A savings account is a vital tool for managing finances, receiving government benefits, and investing. While most people frequently use their bank accounts for deposits and withdrawals, many remain unaware of the specific rules governing cash transactions in these accounts. The Income Tax Department of India has set clear guidelines on how much cash you can deposit without raising red flags.
No Limit on Holding, But Rules for Cash Deposits
There is no legal cap on the amount of money you can hold in your savings account. However, there are restrictions when it comes to cash deposits. While digital transfers and cheque deposits can be made freely, cash deposits are subject to limits and scrutiny under Income Tax regulations.
According to the Income Tax Department, any cash deposit of ₹50,000 or more requires you to provide your PAN number to the bank. While you can deposit up to ₹1 lakh in cash per day, the cumulative total matters too.
Yearly and Cumulative Limits to Watch
If you’re not making cash deposits frequently, you can deposit up to ₹2.5 lakh in a financial year without triggering mandatory income verification. However, if your total cash deposits exceed ₹10 lakh in a financial year, you must be able to justify the source of the funds.
This ₹10 lakh limit applies collectively across all savings accounts held by an individual in various banks. Once this threshold is crossed, the transaction is reported by the bank to the Income Tax Department.
Violating the Rules Can Attract Scrutiny
If a depositor fails to justify large cash deposits, they may come under the Income Tax Department’s radar. Failing to provide a legitimate source of income can result in a penalty or investigation. That said, cash deposits above ₹10 lakh are not illegal — they simply require proper documentation and disclosure.
Key Takeaways for Account Holders
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No limit on balance: You can hold unlimited funds in a savings account.
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PAN is mandatory for cash deposits of ₹50,000 or more.
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Daily cash deposit limit: ₹1 lakh in a day.
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Annual cash deposit limit: ₹10 lakh per financial year without reporting obligation.
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Crossing ₹10 lakh requires disclosing the source of income to avoid penalties.
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Applies across all accounts owned by the individual, not just one.
Being aware of these rules not only helps you stay compliant but also avoids unwanted attention from tax authorities. If you’re dealing in high-value cash transactions, keeping detailed records and being transparent with the IT department is essential.
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.