Income Tax Alert: What Happens If You Deposit ₹15 Lakh Cash in Your Savings Account?

Depositing a substantial amount like ₹15,00,000 in your savings account may seem routine for some, especially after property or asset sales. However, without proper documentation, this could lead to an income tax notice from the authorities under various sections of the Income Tax Act.

What Triggers a Tax Notice for Large Cash Deposits?

As per Section 285BA, banks must mandatorily report cash deposits above ₹10,00,000 in a financial year. When such a deposit is noticed, the Income Tax Department may issue a notice under Section 68 or 133(6) asking for explanation and proof of source. If the amount is not disclosed in your tax return, a notice under Section 148 may follow. Cash receipts over ₹2,00,000 in certain transactions are prohibited under Section 269ST.

Key Regulations Linked to Large Cash Deposits

All cash deposits above ₹50,000 must include your PAN. If cumulative cash deposits across savings bank accounts exceed ₹10,00,000 per financial year, they are flagged by financial institutions via Statement of Financial Transactions (SFT). If the income tax return doesn’t reflect such income appropriately, action may be initiated under anti-evasion provisions.

Implications of Unexplained Cash

Unexplained deposits could be taxed under Section 68 or Section 69A. If not properly justified, a flat tax of 60% is applied with a 25% surcharge and 6% penalty, bringing the total tax liability to 84%. No deductions or exemptions are allowed on such income, making it critical to maintain documentary evidence like sale receipts, gift deeds, or bank withdrawal proofs.

Read More: Income Tax Department Drops ₹8,500 Crore Transfer Pricing Case Against Vodafone!

How to Stay Compliant and Avoid Notices

Always maintain accurate records of all large deposits and the source of funds. Transactions over allowed limits should be routed through proper banking channels, and declared while filing your ITR. Avoid accepting large cash amounts, and use bank transfers wherever possible.

Conclusion

Depositing large sums like ₹15,00,000 into your savings account is not illegal but raises compliance obligations. Timely reporting, valid documentation, and transparency about source of funds are essential to avoid penalties or notices from the Income Tax Department.

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