In India, majority of the business entities have current accounts associated with their banks. Savings accounts are mostly preferred by individual people for their personal finance needs. A current account provides these businesses a variety of benefits. It offers them great deals and helps them to process their financial transactions without any difficulty. It helps businesses in availing tailor-made services and a range of other benefits that are a specified feature of a current account. A few examples of these services include greater number of issues cheque books, higher transaction limits, attractive loan rates, special Forex rates, etc.
If you just have opened a current account for your business or are about to do so, then chances are that you will want to accumulate as much information as you can to make sure that you know the operational know-how of your bank account. You will need to know every basic thing that there is to know. One such area that you must be informed about is that of cash deposits. Depositing cash into your account is an important part of running your current account. While you may want to deposit cash in your current account, you must also be aware of the limits that you can deposit up to. There are official rules on cash deposit limits for both savings and a current account.
Let us have a look at how much cash one can deposit in a current account.
As per the Income Tax Department of India, current account holders can deposit cash up to a limit of 50 Lakhs. An account holder must be aware of this limit and make sure it is not breached. Crossing this limit set by the Income Tax Department may mean that you can attract an official notice from this department. It is not a desirable scenario and hence you may need to be mindful of this cash deposit limit.
This cash deposit limit on a current account is considerably higher than that for a savings account. Since current accounts are designed to enable large amounts of high value transactions, even the cash deposit limit on these accounts is higher. The same is not seen in a savings account, where the cash deposit limit is way lower than 50 Lakhs. Savings accounts can also attract an Income Tax notice if your amount is greater than the normal limit. Similar to cash deposits, both these accounts have limits on other actions like fixed deposits, etc.
It is also imperative to know that it is just not cash deposits that have a ceiling limit to them. Even transactions done from your account have a limit to them. Any higher transaction than the permissible limit, is bound to attract the Income Tax Department, as seen above.
Disclaimer: The above article is subjective and generic in nature. It is purely for informational purposes and should not be substituted in place of professional advice.