10 Lakh Rupees Many people save money in their bank accounts for future needs. Some keep it for emergencies, some for children’s education, marriage, or to buy a house. But did you know that if you have ₹10 lakh or more in your bank account, the Income Tax Department may send you a notice? This doesn’t mean you did something wrong, but it is important to understand why this happens and how you can avoid problems.
Why Does Income Tax Send a Notice?
10 Lakh Rupees The Income Tax Department keeps a close eye on high-value transactions. The main reason is to stop black money and tax evasion. Whenever a person deposits or withdraws a big amount of money in a bank account, the bank reports it to the tax authorities.
According to rules:
- If ₹10 lakh or more is deposited in a savings account in one year, it can be reported.
- If ₹50 lakh or more is deposited in a current account, it can also attract attention.
- Cash deposits above ₹2 lakh at one time during special schemes like demonetisation in the past were checked strictly.
This information is recorded in a system called Annual Information Return (AIR) or Statement of Financial Transactions (SFT). When the system notices unusual transactions, the tax department may send a notice asking you to explain the source of your money.
Common Reasons for Getting a Notice
- Large Cash Deposits – If you put big amounts of cash in your account without showing income proof.
- Mismatch with Income Tax Return (ITR) – If you show low income in your ITR but deposit big amounts in the bank.
- High-Value Transactions – Spending huge amounts on credit cards, buying expensive property, or investing heavily without declaring income.
- Not Filing ITR – If you earn enough to file income tax but don’t, yet keep large sums in your account.
Example to Understand
Suppose you are a salaried person earning ₹8 lakh per year. You keep depositing small savings every month and after a few years your savings reach ₹10 lakh. If your income and savings are properly shown in your ITR, then there is no problem.
But imagine someone earning only ₹3 lakh a year, suddenly depositing ₹10 lakh in their bank account without explanation. The tax department will want to know where that money came from.
How to Avoid Getting into Trouble
Getting a notice doesn’t always mean punishment. It just means you need to explain your money. But still, you can take steps to avoid stress:
1. Always File Your ITR
If your income is above the basic exemption limit (currently ₹2.5 lakh per year), you must file your ITR. Even if you don’t come under tax liability, filing ITR creates a clear record of your income and savings.
2. Keep Proof of Your Income
If you deposit a big amount, always keep documents ready. For example:
- Salary slips
- Sale deed of property
- Gift deed if money is gifted
- Loan documents
These papers prove that the money is legal.
3. Avoid Large Cash Transactions
Where possible, use digital payments or bank transfers. Huge cash deposits are the main reason for tax notices.
4. Show Correct Income in ITR
Never hide your real income. If your bank statement and ITR don’t match, the tax department will quickly notice.
5. Plan Investments Properly
If you invest in fixed deposits, mutual funds, or property, make sure the source of money is explained in your ITR.
What to Do If You Get a Notice?
Don’t panic if you get a notice. Many people receive them every year. Here’s what you can do:
- Read the notice carefully – It will mention the year and the reason for notice.
- Check your ITR – See if there is any mistake or mismatch.
- Reply online – Most notices can be answered online through the Income Tax e-filing portal.
- Submit proof – Provide salary slips, bank statements, or other documents to justify the deposit.
- Take help from a CA or tax expert – If you are not sure how to reply, consult a professional.
Final Words
Having ₹10 lakh in your bank account is not a crime. In fact, it shows good financial planning. But the tax department wants to ensure that the money you keep or spend is from legal income. The simple rule is: If your money is earned legally and shown in your ITR, you don’t need to worry. But if you try to hide income or make unexplained cash deposits, you may face trouble. So, file your ITR every year, keep your documents ready, and stay transparent. That way, you can enjoy your savings without any fear of an Income Tax notice.
