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I believe this question is only for Indians, but others may help too.

With reference to this link, I found a point about high valued transactions as follows

If cash aggregating to Rs 10 Lakh p.a. is deposited in your Bank Savings Account.

In another question, if the interest acquired by a person in a fiscal year is more than Rs 10,000 /-, then he has to pay tax (if I understood it right from that post).

Now my doubt is, is the tax applied on these high valued deposits, even if they're for a very period of time? e.g. if I deposit Rs 10 Lakhs today and if I withdraw it back after two days, should I worry? Or should I worry only if the amount stays in the account for one complete fiscal year ?

Thank you very much.

  • For your help I found something here (point 1). – azam Aug 23 '16 at 16:53
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is the tax applied on these high valued deposits,

No tax is not applied on high value cash deposits. These are monitored and tracked. For example one deposits Rs 15 lacs cash in his bank account. This will be reported to Tax Authorities. At year end if one files a return showing income of say Rs 40 lacs and tax paid accordingly, then fine. But if the return only show say Rs 2 lacs as income, then Tax Authorities will question from where you got Rs 15 lacs. If you have a explanation, then fine.

So high value transactions are monitored by Tax authorities to find out if there is some kind of tax evasion.

if I deposit Rs 10 Lakhs today and if I withdraw it back after two days, should I worry?

This transaction would be reported, if there is a query and you can explain then there is no reason to worry. The interest for 2 days would be around Rs 220, and depending on other interest you may have to pay taxes.

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