Cash Deposit Rules Changed: Know the New RBI Guidelines for Savings and Current Accounts

The Reserve Bank of India (RBI) has introduced new rules for cash deposits, impacting millions of account holders across the country. If you regularly deposit large sums of money in your bank account, it’s essential to stay informed to avoid penalties or scrutiny from the Income Tax Department.

New Cash Deposit Limits for Savings and Current Accounts

Under the revised guidelines issued by the RBI, a savings account holder can now deposit up to ₹10 lakh without mandatory reporting. Exceeding this threshold may not result in immediate taxation, but it requires disclosure under the Annual Information Return (AIR) to the Reserve Bank or the Income Tax Department.

For current accounts, the limit is significantly higher at ₹50 lakh per financial year. Deposits beyond these amounts can trigger red flags during financial scrutiny and may invite notices if not backed by valid sources of income.

PAN Card Mandatory for High-Value Transactions

To ensure financial transparency and curb black money, the use of PAN (Permanent Account Number) has been made mandatory for the following transactions:

• Cash deposits of ₹50,000 or more in a single day

• Cumulative transactions exceeding the prescribed annual limits

These rules are designed to track the origin of funds and ensure that income sources are legitimate. While no tax is automatically levied, the taxpayer is expected to provide proof of income or source of funds if questioned by authorities.

What You Need to Do

If your savings regularly exceed the ₹10 lakh threshold, here are steps to stay compliant:

• Maintain transaction records and keep all income documentation ready.

• Disclose large deposits in your Income Tax Return where necessary.

• Link your PAN and Aadhaar to your bank accounts to avoid disruption.

• Consider investing surplus funds in fixed deposits, mutual funds, or other financial instruments to manage wealth efficiently.

Several banks also offer auto-sweep facilities, converting excess funds in savings accounts into fixed deposits to maximize returns and maintain compliance.

For account-specific details, visit your bank’s official website or speak to a financial advisor.