Under the cash deposit limit rules of Income Tax, a bank has to report the cash deposits made in a savings account to the Income Tax Department once they hit Rs 10 lakh in a financial year. Still, there is no legal maximum on how much you can deposit. Many families think that Rs 10 lakh is a hard ceiling, but in fact it is just a reporting trigger under the Statement of Financial Transactions (SFT), now set by Rule 237 of the Income-tax Rules 2026, which replaced Rule 114E.
For current accounts, CA Club India says the reporting begins at Rs 50 lakh of cash deposits or withdrawals in a financial year. Electronic credits such as salary, NEFT, IMPS and UPI are not counted towards the savings account trigger.
FinPulse India reports that under Rule 159 of the Income-tax Rules 2026, PAN is required when cash deposits or withdrawals across bank and post office accounts total Rs 10 lakh or more in a year.
The Rs 2 lakh bar on receiving cash
The actual hard restriction is on receiving cash. As per Taxgarden, Section 269ST of the 1961 Act bars a person from receiving Rs 2 lakh or more in cash from one person in a day, in one transaction, or for one event. Same restriction is numbered Section 186 under the Income-tax Act, 2025.
Taxclue says the penalty is 100% of the amount received, levied under Section 271DA of the 1961 Act, now Section 451 of the Income-tax Act, 2025, and it falls on the recipient and not the person who pays.
People sometimes split a big payment into smaller cash amounts but RegisterKaro says the authorities sum up all the amounts linked to the same person, transaction or event. Loan instalments are treated differently, and each instalment below the limit can be paid in cash to an HFC or NBFC, as the CBDT clarified in 2017 that instalments are not added together.
Other cash limits and what is unsettled
Cash payments towards credit card bills are also watched, as per Taxgarden. Payments of Rs 1 lakh or more in cash during a year are reported, while payments made through non cash modes are reported only from Rs 10 lakh.
Businesses encounter another restriction. Taxgarden points out that Section 40A(3) forbids business expense paid in cash to a single person over Rs 10,000 in a day, while the limit goes up to Rs 35,000 for goods carriage. The similar clause in the 2025 Act is Section 36(4).
