FINANCIAL AWARENESS AND TIPS:-
Bank Transactions & Compliance:-
1. PAN – Permanent Account Number
PAN is mandatory for opening any bank account.
Must be linked with Aadhaar to remain valid.
Required for TDS, filing ITR, and large financial transactions.
2. HUF (Hindu Undivided Family) Account
Needs a separate PAN.
Ideal for managing ancestral income (especially agriculture).
Useful for tax planning and asset segregation.
3. Types of Bank Accounts
Savings Account: For individuals; limited transactions allowed.
Current Account: Must be used by businesses/professionals (including farmers if they sell produce regularly).
No transaction limit.
No interest paid.
Required for GST and professional compliance.
4. Cash Deposit Restrictions & SFT Reporting
Cash deposits above â‚ą10 lakh/year in savings and rs 50 lacs in current account are reported under SFT to Income Tax Department.
Maintain source records to avoid notice or scrutiny.
5. Cash Withdrawal – TDS Rules
TDS @ 2% if annual cash withdrawal > â‚ą1 crore (from all accounts in one bank).
If you haven’t filed ITRs in previous years, TDS may apply at lower limits (₹20 lakh).
6. KYC Compliance
KYC (Aadhaar, PAN, photo, address proof) must be updated regularly.
Incomplete KYC may result in account freeze or blocked transactions.
7. Interest Income – TDS & Forms
No TDS on bank interest if:
Up to â‚ą50,000/year for regular depositors.
Up to â‚ą1,00,000/year for senior citizens.
Submit:
Form 15G: For individuals (below 60) with income below taxable limit.
Form 15H: For senior citizens with income below taxable limit.
Submit at the start of financial year to avoid TDS.
8. Joint Accounts – Pros & Cons
Pros:
Shared access, useful for family or business.
Helps with continuity in case of death of one holder.
Cons:
Legal disputes on ownership may arise.
Taxation may depend on contribution ratio.
9. Ancestral Agricultural Income – HUF PAN
Agricultural income from ancestral land should be routed via HUF account & PAN.
Helps in proper accounting and avoids mixing with individual income.
10. Bank Statements & Interest Certificates
Collect:
Bank Statements (monthly or annual – online accepted for audit).
Interest Certificate (accrued & received, FD-wise).
Essential for ITR filing and accounting purposes.
11. FD Bifurcation in Family Members’ Names
Split large FDs among family members (spouse, parents, children).
Helps manage tax liability and TDS.
Allows submission of Form 15G/15H for each holder if eligible.
Interest will be taxable in real owner’s name based on source of funds.
12. Deposit Insurance – DICGC
Bank deposits (savings, current, FDs, RDs) are insured up to â‚ą5 lakh per person per bank.
Tip: To increase insurance cover:
Use joint accounts with different combinations.
Open accounts in different banks.
Summary & Tips:
Use current account for business / profession / farm produce sales.
Avoid high cash transactions; use banking channels.
Update KYC, PAN, Aadhaar regularly.
Plan FD and interest income smartly to avoid TDS.
Ensure bank deposits are within insurance limits or diversified wisely.
Team- Intellex Strategic Consulting Private Limited
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