Nowadays almost every person uses a savings account. In today's time, a bank account has become very important. In a family, along with parents, children also have an account. Be it salary or scholarship, everyone needs a bank account number. However, no limit has been set on the maximum amount to be deposited in a savings account. But very few people know that the interest you get on a savings account comes under the purview of income tax.
Many people in the country deposit their savings in a bank account. Today in this article we will tell you when and how much tax is levied on a savings account. According to the Income Tax rules, how much tax is levied on a savings account?
For your information, let us tell you that there are two types of bank accounts - one is a savings account and the other is a current account. Those who open an account to save money select the option of a savings account.
If we talk about savings accounts, then the bank gives many benefits like interest in it. 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 taxes on the savings account as well.
Know when tax is levied on savings account:
Although there is no limit on depositing money in a savings account. Many bank holders are not even required to maintain a minimum balance. But when more than a limit of money 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 (Income Tax Return). If you keep more money in the account, then you will have to pay tax on the interest received from the bank.
Tax is levied on this amount:
According to the Income Tax section, 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 he gets interest of Rs 10,000 on the 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 the interest.
Give information about the savings account to the Income Tax:
According to the rules of the Income Tax Department, if a person keeps Rs 10 lakh or more in cash in his savings account in a business year, then he should give this information to 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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