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Cash deposits above ₹10 lakh in a savings account trigger tax scrutiny
Banks report cash deposits above ₹10 lakh in a financial year to the income tax department. The money is not taxable by itself, but the source must be disclosed in your ITR.
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Depositing cash into a savings account is routine. Cross ₹10 lakh in a single financial year, and the bank flags the activity to the income tax department.
The ₹10 lakh threshold applies whether the cash arrives in one lump sum or as a series of smaller deposits. The bank is required to report the total, not to assume anything about the source. A report does not automatically mean a tax notice. It means the department can review where the money came from.
If the total crosses ₹10 lakh, you must disclose the source when filing your income tax return. The cash itself is not taxable just because it was deposited. Taxability depends on the source. Salary, business income, stock trading, rental income, or any taxable stream is taxed at the applicable rate regardless of how it hits the account. The ₹10 lakh reporting rule is about tracking, not taxing.
What matters is documentation. Salary slips, business revenue records, rental agreements, or any paper trail that matches the deposit size. The tax department can ask for it. Having it ready avoids back-and-forth.
A few other compliance rules apply to cash transactions beyond the annual limit. The income tax department expects banks to report certain high-value moves, whether deposit or withdrawal, under the same framework. Checking account statements regularly keeps you inside the boundaries. If you do cross the limit, a running log of each large deposit or withdrawal is the best defense against a follow-up notice.
Eshita Gain is a digital journalist at Mint, where she joined in May 2025. She writes on corporate developments, personal finance, markets, and business trends, with a focus on delivering timely and relevant stories to a broad audience.