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Tax liability for money in bank account

11 October 2019

Is tax charged under slab rates for money in banks after crossing specified limits. provide me details regarding such taxability

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9 Replies

sabyasachi mukherjee (27589 Points)
Replied 11 October 2019

Taxability is on the basis of slabs which is passed in Lok Sabha every year while presenting the Budget.
For example
This year the finance bill hv been passed .

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Suresh Thiyagarajan (Student) (3986 Points)
Replied 11 October 2019

1. Income tax will be charged only for your income. The income tax department will not irresponsibly charge tax based on your bank deposits or balance.
2. However, they could as for the source of such income which is natural in any case.
3. Banks too have no right to deduct TDS unnecessarily for the deposit you have made. They may ask for a source but no right to deduct tax without your knowledge.
Please correct me if the above solution has an alternative view.

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Kapadia Pravin (17259 Points)
Replied 11 October 2019

@ Riyaz
There is no tax liability for money in bank account. (not any specified limits)

There is tax on interest received from banks ( from SB account, FDR etc) subject to 80TTA deduction (80TTB for senior citizen)
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Sabyasachi for what issue of query is your reply ???

Riyaz ahmed ahmed (30 Points)
Replied 11 October 2019

Ok if money in the bank exceed 250000 i.e basic exemption limit. will the bank charge tax in excess of basic exemption limit

Kapadia Pravin (17259 Points)
Replied 11 October 2019

Noooo Sir. Bank balance has nothing to do with income tax basic limit or bank charging any tax.
Enjoy without any tension.

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Suresh Thiyagarajan (Student) (3986 Points)
Replied 11 October 2019

1. Money deposited into your bank account not necessarily be your income (could also be your savings).
2. Moreover, it is not the banks' responsibility to track your income and deduct TDS every time when you have balance in your account.
3. Bank deducts TDS only with respect to income which they are providing or crediting it to your account ie like interest.
4. You can freely maintain balance in any banks in India provided a proper explanation to its source is available. CHILL !!
Please correct me if the above solution has an alternative view.

Riyaz ahmed ahmed (30 Points)
Replied 11 October 2019

Then why many business persons don't maintain excess balance in their accounts. why they transfer such amounts to other bank accounts for reducing income tax. why they do like that whereas tax is not charged on money in bank as said by you

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Kapadia Pravin (17259 Points)
Replied 11 October 2019

@ Riyaz
You are holding wrong information

Riyaz ahmed ahmed (30 Points)
Replied 12 October 2019

What do you mean by wrong information. I mean to say that business people don't hold too much cash in their bank accounts. is they afraid of charging income tax