• Cash deposit

I am a non-working student age 26 years. I wish to make a cash deposit in the amount of INR 3,25,000/- in my newly opened savings account at SBI. It is NOT a gift from a relative. What is the procedure for it? Do I have to declare the deposit? If so, how do I do it?
 Since I am currently not working, how can I deposit the cash without scrutiny from the IT department? Is it taxable? If so, how?
Asked 17 days ago in Income Tax from Noida, Uttar Pradesh

Hii

you can deposit this amount in your bank account by showing as tuition income, but to avoid any notice its better to deposit amount in 7-8 installments below 50000 in every installment.

if you dont have any other income then this amount is not taxable as in current financial year income of individual  up to Rs. 500000 is non taxable

hope your query is resolved now.

Lalit Bansal
CA, Delhi
637 Answers
41 Consultations

5.0 on 5.0

Dear Sir,

 

Hope you are doing well !!

 

It is advisable to deposit the amount in installments (below than Rs 50,000 otherwise you will have to mention your PAN number). 

 

However, you will not be liable for any tax as you can get the benefit of rebate u/s 87A.

 

You can claim tax rebate under this provision if you meet the following conditions:

  1. You must be a RESIDENT INDIVIDUAL; and
  2. Your Total Income after Deductions (under Section 80) doesn’t exceed Rs 5 lakh.
  3. The rebate is limited to Rs 12,500. This means that if the total tax payable is lower than Rs 12,500, then that amount will be the rebate under section 87A. This rebate is applied to the total tax before adding the Education Cess (4%).

 

 

Payal Chhajed
CA, Mumbai
2853 Answers
39 Consultations

5.0 on 5.0

True but not 100%. if you deposit below 50000 and in aggregate below 10 lakhs in year then no notice.

 

Lalit Bansal
CA, Delhi
637 Answers
41 Consultations

5.0 on 5.0

- What is the source of cash?

Vivek Kumar Arora
CA, Delhi
2942 Answers
144 Consultations

5.0 on 5.0

- You can deposit it in one installment. Threshold limit for reporting of cash deposit is Rs.10 lacs. It does not matter if you deposit less than Rs.50,000. Bank is already having your PAN. No need to worry.

Vivek Kumar Arora
CA, Delhi
2942 Answers
144 Consultations

5.0 on 5.0

Sir you can deposit cash but it's advisable to deposit in small installment also the limit has been increased from 2.5 lakh to 10 lakh now. During demonitisation it was 2.5 lakh and now limit for income has been imcreincr to 5 lakh so even if they consider it as income you won't have to pay any tax.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo
CA, Jaipur
1981 Answers
17 Consultations

5.0 on 5.0

The limit has been increased from 2.5 lakh to 10 lakh.

Payal Chhajed
CA, Mumbai
2853 Answers
39 Consultations

5.0 on 5.0

 

I hope you understand holding and depositing such a good amount of cash is definitely an issue.   Your source of fund should definitely sound reasonable when questioned. Yes deposit more than 25L can lead to scrutiny.   Having savings of 325,000 cash in a short span post demonetization sounds unacceptable.  If you say savings, he question would come how did you sustain yourself.

You should bifurcate the source between gift and savings (if true). Disclose the gift in tax return.  Also, ask the donor to do bank transfer instead of cash (if it’s a good amount).  Make small small deposits in bank over couple of years.  If you need more discussion and can explain the source do feel free to call.

Jasmina Jain Shah
CA, Greater Mumbai
361 Answers
4 Consultations

5.0 on 5.0

Hi,

 

There is no such rule that if you deposit cash more than 2.5 lacs, the case will come under scrutiny.

 

If you can justify the source of cash, there should not be any problem. Department can ask for list of relatives who have gifted you the amount. etc 

Lakshita Bhandari
CA, Mumbai
3545 Answers
174 Consultations

5.0 on 5.0

I would advise you to keep the back-up working of amount deposited in bank.

Lakshita Bhandari
CA, Mumbai
3545 Answers
174 Consultations

5.0 on 5.0

Hello,

 

Advisable to deposit the cash in installments.

There is no limit of Rs. 2.5 L for cash deposit in a F.Y.

I hope this answer satisfies your requirement.

 

Regards,

CA Hunny Badlani

Badlani & Associates

Hunny Badlani
CA, Neemuch
794 Answers
1 Consultation

5.0 on 5.0

Better to keep the working for this amount with you in case of any need in the future.

Hunny Badlani
CA, Neemuch
794 Answers
1 Consultation

5.0 on 5.0

Hi,

 

Gifts from relatives are exempt u/s 56 of income tax act.

 

However, it is advisable to maintain records of gift money.

 

Payal Chhajed
CA, Mumbai
2853 Answers
39 Consultations

5.0 on 5.0

Hello Sir,

 

There is no need to worry.

 

You can deposit the entire amount in one installment provided you have sufficient proofs to justify the same.

Karishma Chhajer
CA, Jodhpur
1286 Answers
7 Consultations

5.0 on 5.0

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