How much Cash Deposit in Bank – 5 Key Points from Taxation Points of View

By | November 19, 2016

Cash Deposit in Bank in India

The Central Board of Direct Taxes (CBDT)  has amended rule 114B of the Income-tax Rules, 1962 meant for quoting PAN by substituting Sl.No.10 by including cash deposit of Rs. 50,000 or more on any one day or aggregating to more than Rs. 2,50,000 during the period 9th November, 2016 to 30th December, 2016.

CBDT has inserted Sl.No.12 to rule 114E by which filing of statement of financial transaction i.e. Annual Information Return (AIR ) would apply to the following:

(i) Cash deposits during the period 9th November, 2016 to 30th December,2016 aggregating to Rs. 12,50,000 or more in one or more current account of a person or Rs. 2,50,000 or more in one or more accounts (other than current account) of a person is liable to be reported by
(a) a banking company or a co-operative society to which the Banking Regulation Act,1949 applies;
(b) Post Master General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898.

Further, sub-rule 5 to rule 114E has been amended whereby the statement of financial transaction (i.e. AIR) of newly listed Sl.No.(12) must be furnished before 31.01.2017 though the statement of financial transactions (regular AIR) in respect of other items are to be furnished by 31st May of the succeeding financial year.

Cash Deposit in Bank – 7 Key Points from Taxation Points of View

  1. PAN required if  Cash Deposit Exceed Rs 50000 in Single Day :- Cash deposit in a bank account or post office exceeding Rs. 50,000 on any one day requires quoting of PAN on mandatory basis (with exceptions given in proviso to rule 114B)
  2. PAN required  if Aggregate Cash deposit Exceeds Rs 250000/-  :-Cash Deposit aggregating to more than Rs. 2,50,000 from 09.11.2016 to 30.12.2016 requires quoting of PAN when such deposit is made with a banking company or a co-operative society to which the Banking Regulation Act,1949 applies or when such deposit is made in post office.
  3. Reporting to Income Tax Department  in case of Cash Deposited in Current Account :- Cash deposits in one or more current account aggregating to Rs. 12,50,000 during the period 09.11.2016 to 30.12.2016 will be reported to Income Tax Department by the banking company or a co-operative bank to which the Banking Regulation Act, 1949 applies or by the Post Master General, as the case may be.
  4. Reporting to Income Tax Department in case of Cash Deposit in Account ( Other than current account ) :- Cash deposit during the period 09.11.2016 to 30.12.2016 aggregating to Rs. 2,50,000 or more in one or more accounts, other than current account of a person will be liable for inclusion in the statement of financial transaction to be submitted to Income Tax Department by a banking company or a co-operative society to which the Banking Regulation Act,1949 applies or the Post Master General, as the case may be.
  5. Time to Report Cash Deposit to Income Tax Department:–  These transactions have to be reported before 31.01.2017 by a banking company or a co-operative bank as the case may be or by the Post Master General to Income Tax Department.
  6. Income Tax Provisions – Take care of Income Tax Provisions in case of Cash Deposit in Bank read Cash Deposit in Bank- Take care of Income Tax Provisions of India

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  1. Pingback: Cash Deposit more than Rs 250000 – Income Tax Notice u/s 133 for enquiry | Tax Heal

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