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Published on 22 July 2025
Understanding Cash Deposit Limits and Income Tax Notifications for Compliance
2025 Cash Deposit Limits & Income Tax Reporting Triggers (India)
Effective Financial Year: 2025-26
Cash Deposit Thresholds
Savings Accounts
- Annual Limit: ₹10,00,000 (across all savings accounts)
- Daily Limit: Cash deposits over ₹50,000/day → PAN mandatory (or Form 60/61 if no PAN)
- Trigger: If total deposits ≥ ₹10 lakh/year → Bank files SFT via Form 61A
Current Accounts
- Annual Limit: ₹50,00,000 (cash deposits OR withdrawals)
- Designed for businesses, but breaches trigger Income Tax scrutiny
High-Value Transactions Monitored
(Reported to Income Tax Department under Form 61A)
| Transaction Type | Threshold (Per FY) | Reporting Entity |
|---|---|---|
| Cash deposit in FD (Fixed Deposit) | ₹10,00,000 | Bank |
| Cash deposit/withdrawal in savings account | ₹10,00,000 | Bank |
| Cash deposit/withdrawal in current account | ₹50,00,000 | Bank |
| Purchase/sale of property | ₹30,00,000 per deal | Registrar/Sub-Registrar |
| Cash investment in MFs, bonds, debentures, shares | ₹10,00,000 | Mutual Fund/Company |
| Cash credit card bill payment | ₹1,00,000 | Bank |
| Non-cash credit card bill payment | ₹10,00,000 | Bank |
| Sale of foreign currency | ₹10,00,000 | Authorized Dealer |
| Cash purchase of drafts, pay orders, RBI instruments | ₹10,00,000 | Bank |
Why You May Receive a Tax Notice
Triggers:
- Deposits don’t match income declared in ITR
- Undisclosed sources of large cash
- Form 61A reports flag high-value activity
What Happens:
- You don’t pay tax immediately, but may get a Section 245 notice
- Income Tax Department can ask for explanation, proof of income source
- If ignored, refund adjustments or penalties may follow
Form 61A: Statement of Financial Transactions (SFT)
- Filed by: Banks, financial institutions, registrars, mutual funds, etc.
- Filing Deadline: May 31 (after the FY ends)
Penalties:
| Offence | Penalty |
|---|---|
| Late filing (post 31 May) | ₹500/day |
| Continued delay after notice | ₹1,000/day |
| Wrong/inaccurate info | Up to ₹50,000 |
| Correction after 10-day window | ₹500–1,000/day after window expires |
Common FAQs on Cash Notices & Section 245
| Question | Answer |
|---|---|
| Does Section 245N(a) apply to residents? | No, only for non-residents or notified PSUs |
| Can I revise my ITR after receiving a 245 notice? | Yes, if original return was timely & e-verified |
| What if the notice is ignored? | IT Department can adjust refunds, levy penalties |
| How to find my jurisdictional officer? | Use “Jurisdiction Details” on Income Tax portal |
| Can I revise a belated return? | No revision allowed if return was filed late |
Best Practices to Stay Tax-Compliant in 2025
Always quote PAN for cash deposits > ₹50,000/day Keep documentation for all large deposits (sale deeds, gift deeds, salary slips, loan papers, etc.) Report all large deposits accurately in your ITR Respond promptly to tax notices and consult a CA if needed Avoid multiple small deposits intended to bypass limits ("structuring")—this too can raise flags Track total deposits across all your accounts (savings, current, FDs, etc.)
Proactive Tip for Professionals & Businesses
Create a Cash Transaction Logbook for FY 2025-26:
- Track daily/monthly deposits
- Flag entries that near/reportable limits
- Reconcile with your ITR at year-end