How to deposit cash above Rs. 2.5 Lacs without tax and penalty

June 25, 2019
By Advocate Chikirsha Mohanty

With demonetization, many citizens are concerned if the cash in hand with them will be treated as black money, and will be penalized taxed on the same if it is deposited in the bank.

Connect with an expert lawyer for your legal issue

During the period 9 November to 30 December, the government has defined a maximum limit of Rs 2.5 lakh on cash deposit, which will not be under scrutiny by the income tax department. If the cash deposits exceed this limit, the bank or post office will automatically report it to the tax department. For current accounts, the threshold limit for cash deposits between 9 November and 30 December will be Rs 2.5 lakh.

But if one has more cash than the said limit, they may deposit it in their bank, but will be subject to scrutiny.

There are people who believe that the magical number - 2.5 lakh deposit, would attract a lot of attention from the tax department whereas anything below that amount would be safe and would not attract any attention. This is just a rumor and completely false. This is not an arbitrary number. It is the maximum exemption limit for income tax for individuals. But you would still have to justify any extra income that you possess via your bank statements.

If you are a salaried person or a housewife, then the savings that you accumulate over the years would still have to be accounted for by justifying it using our bank statements. The ta department would tally your withdrawals and deposits from the past, your lifestyle and the lifestyle of your spouse and then decide if the savings that you show is feasible and believable.

Consult: Top Banking / Finance Lawyers in India

Advocate Anuj Aggarwal, Taxation Lawyer explains how you can deposit more cash than the limit and respond to possible inquiries from the income tax department.


These guides are not legal advice, nor a substitute for a lawyer
These articles are provided freely as general guides. While we do our best to make sure these guides are helpful, we do not give any guarantee that they are accurate or appropriate to your situation, or take any responsibility for any loss their use might cause you. Do not rely on information provided here without seeking experienced legal advice first. If in doubt, please always consult a lawyer.

Googling your legal issue online?

The internet is not a lawyer and neither are you.
Talk to a real lawyer about your legal issue.

Popular Tax Lawyers

Advocate Ricky Chopra
Karkardooma Court, Delhi
18 years Experience
Advocate Bala Janaki
330 Thambuchetty Street, Chennai
34 years Experience
Advocate Barkha Bhalla
Banjara Hills, Hyderabad
16 years Experience
Advocate Surangama Sharma
Gomti Nagar, Lucknow
4 years Experience
Connect with top Tax lawyers for your specific issue

Tax Law Articles

Here is what you should do if you receive a notice under Section 143(2)

Procedure and duration for claiming a tax refund

Steps for e-filing VAT returns in India

Penalties for income tax evasion

User Reviews

4.8 - 17 reviews

June 25, 2019 How to deposit cash above Rs. 2.5 Lacs without tax and penalty

Nicely written article. Very comprehensive.

Karan on Jul 05, 2019

it’s a very good article

Pratik on Jun 17, 2019

good advice. Who can I contact for my legal issue?

Krishan on Jun 19, 2019

thanks for the legal advice

Roshan on Jun 24, 2019

Nice one.

Anurag on Jun 24, 2019

very nice article

Abhinav on Jun 12, 2019

needed legal help…whom shall I contact?

Sneha on Jun 12, 2019

Very good article

Aishwarya on Jun 11, 2019

Good work with the article. Solved all my legal queries. Regards.

Savita on Jun 24, 2019

Helped a lot in understanding the law.

Sourabh on Jun 03, 2019

nice article. Thanks for the information

Jaya on Jun 14, 2019

very informative. Can you tell more about this

Shyam on Jun 18, 2019

nice artcile

Abhinav on Jun 07, 2019

great content. Thanks.

Srikanth on Jul 01, 2019

Thanks for the detailed article.

Amandeep on Jul 07, 2019

The writer has explained the law perfectly.

Praveen on May 30, 2019

nicely written

Shekhar on Jun 12, 2019