Cash Deposit & Transaction Limits in Savings Accounts as per Income Tax Rules (2025)
In 2025, the Income Tax Act of India continues to enforce strict monitoring of large cash transactions in a bid to curb tax evasion, money laundering, and unaccounted wealth. One such area under regulation is cash deposits in savings accounts, where both individuals and financial institutions are held accountable for compliance.
💰 Savings Account Cash Deposit Limit
According to the Income Tax Act, individuals can deposit up to INR 10 lakh in cash into their savings bank account in a financial year without triggering a mandatory report to the Income Tax Department. For current accounts, commonly used by businesses, this threshold increases to INR 50 lakh.
While these deposits aren’t taxed immediately, banks and financial institutions are required to report transactions exceeding the specified limits.
📤 Cash Withdrawal Rules — Section 194N
Section 194N outlines Tax Deducted at Source (TDS) on cash withdrawals:
- 2% TDS on withdrawals exceeding INR 1 crore annually.
- For non-filers of ITRs (past 3 years):
- 2% TDS on withdrawals over INR 20 lakh.
- 5% TDS on withdrawals above INR 1 crore.
Note: TDS under this section is not considered taxable income and can be claimed as credit while filing the ITR.
⚖️ Cash Receipt & Transaction Limits — Section 269ST
Under Section 269ST, any individual receiving INR 2 lakh or more in cash from a single person in one transaction or in aggregate in a day, will attract a penalty equal to the amount received. However, this excludes bank withdrawals.
💼 Cash Loans & Repayments — Sections 269SS & 269T
Accepting or repaying cash loans exceeding INR 20,000 may result in a 100% penalty of the transaction amount.
🧾 Tax on Unexplained Deposits — Section 68
If the taxpayer fails to explain the source of cash deposits, the Income Tax Department can impose a:
- 60% tax
- 25% surcharge
- 4% cess
This can lead to an effective tax rate of over 83% on unexplained income.
🏢 Business Income Compliance — 44AD/44ADA
Cash deposits aligning with declared turnover under sections 44AD/44ADA are exempt from scrutiny. However, non-business-related deposits may attract investigation.
🔍 Other Cash Transaction Limits
🏦 Cash Deposit Limit in Current Accounts
Banks vary in deposit caps:
- SBI: INR 5 lakh to INR 100 crore/month.
- HDFC: Up to 10× of average monthly balance or INR 60 lakh.
Beyond these limits, banks may apply service charges.
🏧 Cash Withdrawal Limit
TDS applies only beyond INR 1 crore/year per bank. If you have three bank accounts, you could withdraw up to INR 3 crore collectively without triggering TDS.
🎁 Cash Gift Limit
Gifts in cash are tax-free up to INR 50,000/year. Exemptions apply for gifts from relatives (parents, spouse, siblings, etc.), regardless of amount.
🏠 Real Estate Transactions
- Buying property with full cash is illegal.
- Payments exceeding INR 20,000 in cash may attract 100% penalty under Section 269SS.
- You may mention small cash amounts in sale deeds, but must remain within legal limits.
💳 Credit Card Cash Payment Limits
- SBI VISA: Daily limit INR 50,000, per transaction INR 25,000.
- HDFC: INR 49,000/day.
- Most banks follow similar restrictions.
🏦 Fixed Deposit Limit (Tax-Saving)
Tax-saving FDs allow up to INR 1.5 lakh/year, with a minimum of INR 100. This qualifies for deductions under Section 80C.
📌 Final Takeaway
India’s Income Tax Act enforces detailed provisions to monitor high-value cash transactions, encouraging digital payments and transparent banking. Staying within the limits ensures compliance, avoids penalties, and helps maintain clean financial records.
