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Bank Transaction Limits India FY 2026-27: Cash Deposit ₹10L Savings Limit, TDS Rules, UPI/IMPS Caps, BSBDA Zero Balance Update
CMA Knowledge | Latest RBI & Income Tax Rules for CMA Students, Finance Pros & Businesses | Updated Jan 12, 2026
As FY 2026-27 kicks off, Indian banking rules demand sharper compliance to sidestep tax traps. RBI and Income Tax have sharpened tools against black money: SFT reporting, TDS deductions, and cash bans under Sections 194N & 269ST. No fixed balance limits exist, but unexplained cash equals taxable income under Section 69A—at slab rates plus up to 100% penalty. This 2500+ word guide equips CMA aspirants, accountants, and businesses with actionable insights, examples, and official links.
Why care? A mismatched deposit can trigger AIS notices, audits, or demands. Master these for seamless finances and exam success.
SFT Reporting Explained: Thresholds & Triggers
Statement of Financial Transactions (SFT) mandates banks to report high-value moves to IT Dept via AIS/Form 26AS. Thresholds:
- Cash Deposits/Withdrawals: ₹10 lakh (savings), ₹50 lakh (current) per FY per bank/PAN.
- FDs/RDs: ₹10 lakh aggregate interest.
- Property: Over ₹30 lakh buys reported.
Example: Salaried employee deposits ₹12 lakh inheritance cash. SFT flags it; ITR proof clears it. Businesses: Align with GSTR-3B turnover. Official SFT rules: Income Tax e-Filing Portal.
Cash Deposits: Savings vs Current Deep Analysis
Savings: Personal haven, ₹10L cap prevents undeclared layering. Current: Business lifeline, ₹50L threshold but GST/ITR cross-verified.
Case Study: Retailer deposits ₹60L festive cash via two current accounts (₹30L each). Compliant if turnover-backed; else, Section 68 addition at 30-42% tax.
Tips for CMA pros:
- Split banks judiciously (e.g., SBI, HDFC).
- Digital receipts via QR/UPI.
- ITR Schedule: Declare all under ‘Other Sources’.
RBI KYC norms apply universally. Master Direction: RBI Banking Regulation.
Cash Withdrawals: Section 194N TDS Mechanics
Same SFT thresholds, plus TDS bite:
| ITR Status (Prior 3 AYs) | 2% TDS From | ₹1Cr+ |
|---|---|---|
| All Filed | ₹1 Cr | 2% |
| None Filed | ₹20L | 2% to 1Cr, 5% after |
Refunds via ITR; cumulative FY basis. Businesses: Use for legit ops, claim under expenses. FAQ: IT 194N FAQs.
Digital Revolution: UPI, IMPS, NEFT, RTGS Limits 2026
Cashless preferred:
| Mode | Limit | Best For |
|---|---|---|
| UPI P2P | ₹1L/day | Daily transfers |
| UPI P2M/Merchant | ₹5L+ (sector-specific) | Business payments |
| IMPS | ₹5L | Instant small-large |
| NEFT | Unlimited | Batch settlements |
| RTGS | ₹2L min, no max | High-value |
FY26 hikes for P2M. NPCI stats: UPI 50% volume. Updates: NPCI UPI.
Section 269ST & 40A(3): Cash Bans for Businesses
269ST: No cash ₹2L+ receipt/day/transaction/person. Penalty: 100%. Applies sales/loans/property.
40A(3): Expenses >₹10K cash/day/person disallowed. Exceptions: Agriculture/banking.
Property cash: ₹20K max. Loans: Digital only above. PDF Guide: IT Cash Rules.
Multiple Accounts: Rules & ITR Reporting
Unlimited accounts; report in ITR-BS. GST: Mandatory portal update. Inoperative? 10Y escheatment risk.
BSBDA 2026: RBI’s Zero Balance Game-Changer
BSBDA Features at Glance
- Zero MAB/penalties from Apr 1, 2026.
- Free RuPay card, 4 ATM freebies/month.
- Full digital: UPI, NEFT, alerts.
- One/family; high-value monitored.
Inclusion boost for low-income. RBI Circular.
PPF/EPF UPI Era: Withdrawals Simplified
PPF UPI transfers by Q1 2026; EPF 75% ATM/UPI access. No branch queues. EPFO: EPFO Portal.
