Short answer: From 1 April 2026, the Income-tax Rules, 2026 replaced the old rule that required PAN for any single-day cash deposit above ₹50,000. You now have to quote PAN when your cash deposits or withdrawals add up to ₹10 lakh or more in a financial year across your bank accounts. Banks also report large annual cash deposits to the tax department, and the ban on receiving ₹2 lakh or more in cash from one person continues. Depositing your own explained money is legal; the rules exist to track unexplained cash.
Last updated: 13 October 2026.
Cash deposit rules in India have changed several times since 2016. The 2022 change, which our original article covered, made PAN or Aadhaar mandatory for cash transactions of ₹20 lakh or more a year. In 2026 the framework changed again, with the Income-tax Act, 2025 and the new Income-tax Rules, 2026 taking effect from 1 April 2026. This guide explains what applies now, what changed, and how to stay out of trouble.
What changed: 2022 rules vs 2026 rules
| Rule | Position in 2022 | Position from 1 April 2026 |
|---|---|---|
| PAN for a cash deposit on a single day | Required above ₹50,000 in a day | Per-day trigger removed |
| PAN for aggregate cash deposits or withdrawals | Required at ₹20 lakh or more in a financial year (rule added in May 2022) | Required at ₹10 lakh or more in a financial year, across one or more accounts |
| Declaration if you have no PAN | Form 60 | Replaced by a new prescribed form (reported as Form 97) |
| Bank reporting of large cash deposits (SFT) | Savings: ₹10 lakh a year; current: ₹50 lakh a year | Reporting of high-value cash deposits continues and shows in your AIS |
| Receiving cash of ₹2 lakh or more from one person | Prohibited (penalty equal to the amount) | Continues under the 2025 Act |
Because the rules and forms were renumbered under the new Act, older articles that quote section numbers such as 269ST or Rule 114B may no longer match the current law. The thresholds above are what matter in practice; check the Income Tax e-filing portal or the tax information section of the Income Tax Department for the latest notified text.
How much cash can you deposit in a savings account?
There is no legal cap on depositing your own money. What changes at higher amounts is documentation and reporting:
- Up to ₹10 lakh a year in aggregate: no PAN requirement under the 2026 rules for the cash transactions themselves, though your bank may still ask for PAN under its KYC policy (most accounts already have PAN linked).
- ₹10 lakh or more a year: PAN must be quoted, and large deposits are reported by the bank to the Income Tax Department through the Statement of Financial Transactions.
- Current accounts: businesses deposit more cash, so the reporting threshold for current accounts is higher, but the deposits still flow into your tax profile.
Reported transactions appear in your Annual Information Statement (AIS) on the e-filing portal. If your AIS shows cash deposits that are much larger than the income in your return, you may get a notice asking you to explain the source.
Worked examples
Example 1: a salaried saver
Meera receives ₹1,20,000 in cash wedding gifts from 25 relatives (each well below ₹2 lakh) and deposits ₹60,000 on two separate days. Before April 2026 each deposit needed PAN because it was above ₹50,000 in a day. Now, since her total cash deposits for the year are well below ₹10 lakh, the PAN rule for cash is not triggered. Gifts from relatives are not taxable, but she should keep a simple list of who gave what in case she is asked.
Example 2: a small shop owner
Arjun runs a grocery shop and deposits about ₹1,00,000 in cash every month into his current account, ₹12 lakh a year. He crosses the ₹10 lakh aggregate, so PAN must be quoted, and the deposits will show in his AIS. This is normal for a business; the key is that his GST returns, books and income tax return reflect the same sales. If he wants a working-capital loan later, consistent bank deposits that match his returns make it easier to qualify (see documents required for business loans).
Example 3: a property advance in cash
A buyer offers to pay ₹3,00,000 of a property advance in cash. The seller cannot accept ₹2 lakh or more in cash from one person for one transaction, and doing so can attract a penalty equal to the amount received. Property payments should go through bank transfer or cheque.
Other cash rules that still apply
- Loans and deposits in cash: taking or repaying a loan or deposit of ₹20,000 or more in cash from or to another person is restricted under long-standing income tax rules. Repay lenders through the bank, not in cash; RBI-regulated lenders also require repayment into their own bank accounts.
- Large cash withdrawals: withdrawals above high annual thresholds (₹1 crore, or a lower limit if you have not filed returns) attract TDS by the bank.
- Health insurance premium: premiums paid in cash do not qualify for the health insurance deduction under the old tax regime.
- Unexplained deposits: cash you cannot explain can be taxed as unexplained income at a high flat rate with penalties. Keep records.
Need funds without dealing in cash? Compare offers from RBI-regulated lenders, disbursed directly to your bank account.
Bank-side limits and charges
Separately from tax rules, banks set their own limits on free cash transactions, cash deposits at branches by third parties, and cash deposit machines. Many savings accounts allow a set number of free cash transactions a month and then charge a fee. Check your bank’s schedule of charges, especially if you run a business through a savings account; a current account is usually more suitable (see our guide to choosing a bank for a current account).
Practical checklist to avoid tax notices
- Link PAN and Aadhaar, and keep PAN updated with every bank.
- Keep a note of the source of any large cash deposit: salary withdrawn and re-deposited, gifts, sale of an asset, business receipts.
- Check your AIS on the e-filing portal before filing your return, and give feedback if any entry is wrong.
- Declare all income in your return; deposits that match your declared income rarely cause problems.
- Avoid cash for property, vehicles and loan repayments; use digital channels that leave a trail. Our guide on keeping digital money safe covers the security side.
- If you receive a notice, reply on time with documents. Our income tax hub explains the 2025 Act basics for salaried people.
Does cash in your account affect loan eligibility?
Lenders read your bank statements. Regular, explainable credits help; sudden large cash deposits just before a loan application can raise questions, because lenders cannot verify the source. Salaried borrowers are assessed mainly on salary credits, and self-employed borrowers on returns and banking turnover. See our guide to how lenders decide eligibility and, for self-employed applicants, loans for the self-employed with ITR.
Frequently asked questions
Is PAN needed to deposit ₹50,000 in cash now?
Under the Income-tax Rules, 2026, effective 1 April 2026, the single-day ₹50,000 trigger was replaced by an annual aggregate of ₹10 lakh. Your bank may still ask for PAN as part of its own KYC policy.
What happens if I deposit more than ₹10 lakh cash in a year?
You must quote PAN, and the bank reports the deposits to the tax department. This is not illegal; you only need to be able to explain the source and show it in your return.
Can I deposit cash in someone else’s account?
Banks may restrict third-party cash deposits and ask for the depositor’s details. If you are paying someone ₹2 lakh or more, use a bank transfer, because the receiver cannot accept that much in cash from one person.
Will my cash deposits show up in my tax records?
Large deposits reported by banks appear in your Annual Information Statement. You can view it on the Income Tax e-filing portal and give feedback if something is wrong.
Do these rules apply to withdrawals too?
Yes. The ₹10 lakh annual aggregate PAN requirement covers cash withdrawals as well, and very large annual withdrawals attract TDS.
Sources
- Income Tax e-filing portal
- Income Tax Department: Tax information and services
- Reserve Bank of India
Disclosure: FundsTiger (Gatimaan Finance Advisors Pvt. Ltd.) is a loan marketplace and lending service provider for RBI-regulated lenders. Aparampaar Finance Pvt. Ltd. (Omozing), one of those lenders, is a related party of FundsTiger. This article is general information, not financial advice. Read your loan agreement and KFS before you decide.