How Much Money I Can Deposit In Bank Without Tax?

In India, there is taxation attached to everything. Whether it is the income tax you pay or the GST that is charged at the purchase and sale of goods, there is a vast and intricate system for taxation. Hence, it is natural to wonder “How much money I can Deposit In Bank Without Tax?”. 

The maximum amount of money you can deposit in your savings account in a financial year is ₹10 lakh. The amount exceeds this limit, the bank will automatically send a report to the Income Tax Department. However, this does not guarantee that any money you deposit under this limit will be tax-free. Banks will have to inform the appropriate authorities for any deposit that goes above this limit for additional verification.

This limit is higher for current accounts at up to ₹50 lakh in a financial year.

Reporting Rules and Their Implications

1. ₹10 Lakh Limit for Savings Accounts:
   If you deposit more than ₹10 lakh in a financial year, the income tax department will receive a report from your bank regarding these transactions.
2. ₹50 Lakh Limit for Current Accounts:
   The mechanism for current accounts is similar. The only exception is the threshold is much higher at ₹50 lakh.
3. Why Reporting Matters:
   In the case of the usual deposits with lower amount, banks do not impose taxes. They often monitor and share details to the tax department for transactions with higher value. The role of the income tax department then is to check and verify the source of the money. More precisely, they will check whether the money actually comes from the source that claims it does.
4. Consequences of Unexplained Deposits:
   If the deposit and the source you have mentioned for it is found legitimate, you can go through the usual paces and complete your tax filing. Otherwise, the deposit amount will be considered ‘unexplained income’. In this case, you will face the tax on this money at a higher rate. Additionally, you may have to worry about penalties or legal action. 

Key Points to Remember

Interest Income:
The interest earned on your savings account is tax-free up to ₹10,000 per financial year under Section 80TTA of the Income Tax Act. Any amount above this limit is added to your total income and taxed according to your income slab.

PAN Requirement:
As per RBI guidelines, you must provide your Permanent Account Number (PAN) for cash deposits of ₹50,000 or more. This helps banks and authorities track large cash transactions.

Bank-Specific Policies:
While the ₹10 lakh reporting threshold is a government guideline, individual banks may set their own limits or frequency restrictions on cash deposits to monitor suspicious activity.

Third-Party Deposits:
Some banks limit the amount of cash that can be deposited into another person’s account. For instance, ICICI Bank restricts third-party cash deposits to a certain amount per day to enhance transparency.

Credit Card Payments:
Large cash payments above ₹1 lakh towards credit card bills are also reported to tax authorities. Publications like Mint and Forbes have noted that such scrutiny helps prevent tax evasion and ensures accountability.

Final Takeaway

Depositing large sums of cash into your bank account isn’t illegal — but it does come under regulatory observation. To stay compliant, always maintain proper documentation for your cash transactions, declare your income accurately, and ensure that your deposits are consistent with your financial profile.

If you frequently handle large amounts of money, consider using digital transfers or cheque deposits, which are more transparent and less likely to attract unnecessary scrutiny.

To balance your savings, taxes, and long-term security, explore Life Insurance Plans  from Shriram Life Insurance that combine protection with tax-saving benefits.