Tuesday, July 23, 2024

Income Tax Rule: Tax is also levied on money kept in Saving Account, know the rules of Income Tax Department here

Bank account has become very important in today’s time. In a family, children also have accounts along with their parents. Be it salary or scholarship, everyone requires a bank account number.

Actually, there are two types of bank accounts – one is Saving Account and the other is Current Account. People who open an account for the purpose of saving money select the option of saving account.

The bank gives many benefits like interest in savings account. Many people do not know that the interest received on the amount deposited in the savings account is not tax free. This means that we have to pay tax on savings account also.

When is tax levied on savings account?

Actually, there is no limit for depositing money in savings account. Many bank holders are not even required to maintain minimum balance. But when more than a limit is deposited in the savings account, then the account holder has to pay tax on it.

In such a situation, you should keep in mind that you keep only that much money which comes under the purview of ITR. If you keep more money in the account than that, you will have to pay tax on the interest received by the bank.

What amount is taxed

According to the Income Tax Act, interest received from a savings account is also counted as income. In such a situation, if the annual income of an account holder is Rs 10 lakh and he gets interest of Rs 10,000 on his savings account. Including this interest, his annual income will now be Rs 10,10,000.

This much income is taxable as per the Income Tax Act. This means that now the account holder will have to pay tax on interest.

Give information about your savings account to the Income Tax Department

According to Income Tax rules, if a person keeps cash of Rs 10 lakh or more in his savings account in one business year, then he should inform the Income Tax Department.

If they do not do so, the department can also take action against tax evasion. Let us tell you that Rs 10 lakh will be considered as income and it is taxable.

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