Cash transaction limits means amount of money that can be transferred or exchanged in cash without going aganist the regulatory standards.
It is regulatory measures which are set by the governments or financial institutions to restrict the amount of cash that can be used in a single transaction or over a specific period.
These limits are implemented to take action against illegal activities such as money laundering, tax evasion etc.
Table of Contents
- Thresholds Limit for savings and current accounts under the Income Tax Act`
- Applicable TDS rates on cash withdrawals
- Penalties for receiving significant cash amounts in a specific year or transaction
- Cash Transaction Limits in Current Accounts
- Daily cash transaction limit as per Section 269ST
- Cash gift limit
- Maximum limit in fixed deposit accounts
- Limitations on cash payments for credit card bills
Thresholds Limit for savings and current accounts under the Income Tax Act
Individuals depositing in savings accounts INR 10 lakh or more in a financial year must notify tax authorities.
Current account holders have a threshold limit of INR 50 lakh.
Applicable TDS rates on cash withdrawals
If withdrawals are more than INR 1 crore, 2% TDS is applicable.
For those who don't file income tax returns –
- 2% TDS applies to withdrawals over INR 20 lakh and
- 5% over INR 1 crore.
Penalties for receiving significant cash amounts in a specific year or transaction
Penalties are imposed on receiving more than INR 2 lakh under Section 269ST.
Cash Transaction Limits in Current Accounts
Limits can vary depending on the bank like SBI sets a deposit limit in current account 5 lakh to INR 100 crore per month.
Daily cash transaction limit as per Section 269ST
Daily limits are set to INR 2 lakh under Section 269ST. Here, transactions can be either cash withdrawals, transfers, and payments.
Cash gift limit
Gifts less than INR 50,000 in a financial year are exempted but if received more than INR 50,000 tax is applicable.
However, for gifts received from immediate relatives or on the occasion of marriage, no tax will be applicable.
Maximum limit in fixed deposit accounts
There is no maximum limit but TDS @ 10% is applicable if interest income on fixed deposits exceeds Rs 40,000 for individuals and Rs 50,000 for senior citizens.
Limitations on cash payments for credit card bills
Cash payments on credit card bills may vary depending upon the banks:
The per day limit for Credit Card (Visa) Bills of SBI is INR 50,000 while the per transaction limit is INR 25,000.
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