How Much Money Can I Save In My Bank Savings Account Without Tax?

How Much Money Can I Save In My Bank Savings Account Without Tax?


money-without-tax

  • Tax Is Applicable On The Income You Earn In India. 
  • Interest That You Earn On The Balance In Your Savings Account Is Your Income. So, Tax Is Applicable On The Interest Income In Your Savings Account During A Financial Year.
  • Interest Earned In Savings Account In Bank Or Post Office Upto Rs. 10000/- Is Tax-Free, According To Section 80 TTA In Income Tax Act, 1961. So, If Your Interest Income Is Less Than Or Upto Rs.10000 Then You Are Not Liable To Pay Any Tax.
  • But, You Have To Firstly Show Interest Income In Your ITR As “Income From Other Sources” And Then Claim Deduction U/S 80 TTA ( Income Tax Act, 1961 )
  • If The Interest Income Is Greater Than Rs.10000, You Need To Pay The Tax On The Differential Amount As Per Income Tax Slab Rates(As Applicable).
  • Moreover, You Should Be Able To Justify Any Amounts Credited In Your Savings Account(If Need Arises).
  • Also, Keeping Excess Amount In A Savings Account For A Longer Period Will Not Give You High Returns.You Will Need To Diversify Your Funds To Earn Good Returns.
  • There Is No Upper Limit To How Much Money You Can Keep In Your Savings Account In India. 
  • You Will, However, Need To Furnish All The Details When Filing Your Income Tax Returns. Also, As Per Rbi Guidelines, The Bank Has To Enquire About The Source Of The Money, Especially If An Amount Larger Than 2 Lakhs Is Deposited At One Go.
  • This Is An Attempt To Prevent Banking Frauds And Wipe Out Any Sort Of Black Money.
  • Savings Accounts Offer Very Low-Interest Rates.
  • For Example, If You Keep Rs.10 Lakhs In Saving Account, Then You Get Nearly Rs.40,000 Interest From Savings Bank Account In One Year. 
  • For Your Information, There Is No TDS On Savings Account Interest. You Have To Declare The Savings Account Interest In Your Returns And Pay Tax For That. 
  • TDS Is Applicable Only For Fixed Deposit Kept In Bank. In Your Case (40-10=30) You Have To Show 40,000 Income From Savings Account And Can Claim 10,000 Deduction And Finally You Have To Pay Tax On Rs.30,000 Only.
  • There’s No Limit Of Maximum Amount To Keep In Savings Account. 
  • Also, Know What Minimum Amount You Need To Have In Your Saving Account?
  • The Minimum Is Rs. 1000/- If Your Account Has Cheque Book Facility. Else, Rs. 500/- Without Cheque Book Facility. 
Thank you Reader
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