Cash Deposit Limit in Savings Account 2026: The ₹10 Lakh Reporting Rule, Section 269ST, and What Actually Triggers a Notice

By Nitish Bharadwaj · Published Aug 8, 2026 · 6 min

Cash deposits of ₹10 lakh or more in a savings account in a financial year get reported to the Income Tax Department via Rule 114E's Statement of Financial Transactions — but that alone rarely triggers a notice; an AIS mismatch with your declared income does. Section 269ST separately bans receiving ₹2 lakh or more in cash in one transaction, with a 100% penalty on the receiver. This guide also covers the ₹50,000 PAN rule and the ₹1 crore cash withdrawal TDS threshold under Section 194N.

Every festival season and wedding, some cash finds its way into a savings account — gifts, business collections, a bonus paid in currency notes. The question that follows is always the same: how much cash can be deposited before the bank or the Income Tax Department starts asking questions? The honest answer involves at least three separate rules that get conflated into one mythical 'limit,' and none of them actually stop you from depositing your own money — they just decide who gets a report about it.

The ₹10 Lakh Number That Gets Deposits Reported, Not Blocked

The figure most people have half-heard is ₹10 lakh, and it comes from Rule 114E of the Income Tax Rules — the provision governing the Statement of Financial Transactions (SFT) that banks file every year. If total cash deposits across all savings accounts at a bank add up to ₹10 lakh or more in a single financial year, the bank reports that aggregate figure to the Income Tax Department, tagged to the account holder's PAN. For current accounts, held mostly by businesses, that reporting threshold is higher, at ₹50 lakh. Crossing ₹10 lakh does not freeze the account or block further deposits — it only means the transaction shows up in the Annual Information Statement (AIS) on the income tax portal, where it needs to line up with the income declared in the ITR.

Section 269ST — Where the Real Penalty Sits

The provision with actual teeth is Section 269ST, and it has nothing to do with a personal deposit limit — it bans any person from receiving ₹2 lakh or more in cash in a day, from one person, in one transaction, or across transactions tied to a single event or occasion. This is why a shopkeeper cannot legally accept ₹2.5 lakh cash for one sale, and why a family cannot hand a caterer ₹3 lakh in cash for one wedding function. Effective April 1, 2026, this same ₹2 lakh cash-receipt ban continues under the Income Tax Act, 2025 as Section 221, with the threshold unchanged — only the section number has moved, in the same way Section 56(2)(x) on gifts moved to Section 92(2)(m). Government bodies, banks, and post offices are exempted from the rule.

What Actually Triggers a Notice

Crossing the ₹10 lakh SFT threshold by itself rarely triggers a notice — the Income Tax Department's Computer Assisted Scrutiny Selection (CASS) system flags a mismatch, not a deposit. If the AIS shows ₹12 lakh in cash deposits for the year but the ITR reports ₹6 lakh in declared income with no other explained source, that gap is what invites a query, not the ₹12 lakh figure on its own. Self-employed professionals, small business owners, and anyone who has sold property or gold for cash should reconcile their AIS against their ITR every year before filing — our guide to reconciling Form 26AS against AIS walks through exactly how to do that check.

The ₹50,000 PAN Rule Most People Forget

Separate from both of the above, Rule 114B requires quoting a PAN for any single-day cash deposit or withdrawal of ₹50,000 or more. Without a PAN, Form 60 with personal details is the fallback. Skipping this isn't a criminal offence, but it does draw a ₹10,000 penalty under Section 272B, and banks will typically refuse to process the transaction at all until either document is provided.

Cash Withdrawal Has Its Own TDS Rule

Section 194N works from the other direction — it doesn't govern what gets deposited, it taxes what gets withdrawn in cash. Withdraw more than ₹1 crore in cash from bank accounts in a financial year, and the bank deducts 2% TDS on the amount above that limit, provided an ITR was filed in any of the preceding three years. Without a filed return in those three years, the threshold drops sharply: 2% TDS kicks in beyond ₹20 lakh, rising to 5% beyond ₹1 crore. This section is renumbered to Section 393(3) under the new Act, with the same thresholds carried over. It's a TDS, not a penalty — it can be claimed back at ITR filing time against the final tax liability. Our full Section 194N guide covers the per-bank aggregation rules, the full exemption list, and exactly how to reclaim the deducted amount.

None of these rules stop anyone from banking their own money — they exist to make sure large, unexplained cash movements leave a trail the Income Tax Department can follow if it needs to. For a joint account, our joint FD account TDS guide covers how tax liability splits between joint holders, and the minimum balance penalty guide is worth a read when deciding which account to route large deposits through in the first place. The same Rule 114E also covers credit card bill payments under a separate ₹10 lakh clause — see our guide to what gets reported when your credit card spends cross ₹10 lakh for how that threshold is checked per bank rather than across your total spending.