Current Account Transaction Limit 2026: With Bank-Wise Threshold and Tax Rules

Overview

A current account is the backbone of business banking in India - used daily by proprietors, companies, traders, freelancers, and professionals to handle high-volume transactions. Unlike savings accounts, current accounts offer no restriction on the number of transactions and are designed for frequent, large-value movements of money.

However, this freedom comes with strict tax surveillance. For FY 2026-27, the Income Tax Department - armed with the new Income Tax Act 2025 and the Draft Income Tax Rules 2026 - has significantly updated its monitoring framework. The old per-day PAN threshold of Rs 50,000 has been replaced with a new annual aggregate approach, and high-value cash transactions are automatically flagged via the Statement of Financial Transactions (SFT).

Whether you run a business or manage accounts for one, understanding current account limits - both banking and tax - is essential to stay compliant and avoid unwanted scrutiny or penalties.

What Is a Current Account?

A current account is a type of bank account designed for businesses, firms, companies, and self-employed professionals who need to make frequent payments and receipts. Key characteristics:

• No limit on the number of transactions per day
• No interest paid on the account balance
• Overdraft facility available (subject to bank approval)
• Minimum balance requirements are typically higher than savings accounts
• Primarily used for business operations, vendor payments, payroll, and tax payments

Daily Current Account Withdrawal and Deposit Limits

Current accounts do not have a single universal daily limit mandated by RBI for all transactions. Instead, limits are set by individual banks based on their internal policies, account type, and customer relationship. However, the following practical thresholds apply for cash transactions:

Cash Deposit Limits (Current Account)

Cash Withdrawal Limits (Current Account)

Important: There is no RBI-mandated upper cap on the total cash a current account holder can deposit or withdraw in a day. However, banks apply their own internal limits (typically Rs 1–10 lakh per day for cash counter transactions), and any aggregate crossing the thresholds above triggers automatic reporting or TDS.

Explore More: Cash Transaction Limits Under The Income Tax Act 2025

Tax Rules & PAN Reporting for Current Accounts in FY 2026-27

Major Shift: Annual Aggregate vs Daily Threshold

The biggest change for FY 2026-27 under the Draft Income Tax Rules 2026 is the overhaul of PAN quoting requirements:

This shift from a per-day rule to an annual aggregate approach reduces friction for legitimate day-to-day transactions while keeping the overall monitoring framework intact.

Also Read: Draft Income Tax Rules 2026: Major PAN Quoting Changes Explained

Statement of Financial Transactions (SFT) - Current Account Rules

Banks are legally required to file an SFT with the Income Tax Department when current account transactions cross the following thresholds. This data appears automatically in your Annual Information Statement (AIS) on the e-filing portal:

• Cash Deposits: Rs 50 lakh or more aggregate per financial year per bank - triggers SFT
• Cash Withdrawals: Rs 50 lakh or more aggregate per financial year - also triggers SFT

Once reported via SFT, the Income Tax Department cross-checks the amounts against your ITR, GST returns, and declared turnover. A mismatch can trigger an e-verification notice or scrutiny assessment.

Case Study: A retailer deposits Rs 60 lakh in festive season cash across two current accounts - Rs 30 lakh in each. Each account individually stays below the Rs 50 lakh SFT threshold. However, the Income Tax Department tracks all accounts via PAN. If the total is disproportionate to declared business income, the department may still initiate scrutiny and add the amount under Section 68 (unexplained cash credits), taxable at 30–42%.

Section 194N - TDS on Cash Withdrawals

TDS on cash withdrawals from current (and other) accounts under Section 194N for FY 2026-27:

Key clarification: TDS under Section 194N is not an additional tax. It is a tax credit that can be claimed against your total tax liability when filing your ITR. Businesses that maintain regular ITR filing face TDS only beyond Rs 1 crore - a high threshold that leaves most SMEs unaffected.

You Might Find This Helpful: TDS Rules on Cash Withdrawals 2026

Section 269ST - Cash Receipt Restriction (100% Penalty)

Under Section 269ST, no person or business is permitted to receive Rs 2 lakh or more in cash:

• In a single transaction from one person
• For transactions relating to one event or occasion (even if split across days)
• In aggregate from a single person in a day

Penalty: Equal to 100% of the amount received in cash - one of the steepest penalties in tax law. This applies to businesses receiving cash for sales, services, loans, or any other purpose.

Section 269SS/269T - Cash Loan Restriction

• Section 269SS: Prohibits accepting a loan or deposit of Rs 20,000 or more in cash
• Section 269T: Prohibits repaying a loan or deposit of Rs 20,000 or more in cash
• Both sections apply to businesses using current accounts

Business Expense Cash Limit - Section 40A(3)

Any business expense paid in cash exceeding Rs 10,000 per day per person is disallowed as a deductible business expenditure. This affects current account holders claiming deductions in their business ITR.

Current Account vs Savings Account: Comparison Table

Transfer Limits for Current Accounts - NEFT, RTGS, IMPS, UPI

Current accounts support all major digital payment modes. Here is a complete overview of transfer limits applicable for FY 2026-27:

NEFT (National Electronic Funds Transfer)

• Minimum Limit: Rs 1 (no minimum set by RBI)
• Maximum Limit: No upper cap set by RBI - individual banks may set their own limits
• Availability: 24×7, 365 days (including holidays)
• Settlement: Batch-wise (processed in half-hourly batches)
• Best For: Non-urgent transfers of any amount
• Tax Reporting: NEFT/digital transfers do not count toward the SFT cash deposit threshold

RTGS (Real Time Gross Settlement)

• Minimum Limit: Rs 2 lakh (mandatory - RTGS is only for high-value transfers)
• Maximum Limit: No upper cap set by RBI - banks may apply their own ceilings
• Availability: 24×7, 365 days
• Settlement: Instant, real-time, transaction by transaction
• Best For: Large, urgent business payments above Rs 2 lakh

IMPS (Immediate Payment Service)

• Minimum Limit: Rs 1
• Maximum Limit: Rs 5 lakh per transaction (NPCI limit; banks may set lower limits)
• Availability: 24×7, 365 days including Sundays and holidays
• Settlement: Instant
• Best For: Urgent transfers up to Rs 5 lakh, including after banking hours

UPI (Unified Payments Interface)

• Standard Daily Limit: Rs 1 lakh per day for most users
• Per Transaction Limit: Rs 1 lakh (standard)
• Higher Limits (specific categories): Up to Rs 5 lakh for select payment types (tax payments, IPO subscriptions, healthcare)
• New User Limit: Rs 5,000 for the first 24 hours (auto-increases after 24–72 hours)
  Availability: 24×7
• Security Update from April 2026: RBI mandated enhanced two-factor authentication (2FA) with dynamic authentication for UPI transactions

Note: UPI and NEFT/RTGS/IMPS digital transactions are not included in the SFT cash reporting threshold. Only cash deposits and withdrawals count toward the Rs 50 lakh current account SFT trigger.

Transfer Mode Comparison at a Glance

Bank-Wise Transfer Limits for Current Accounts - SBI & HDFC

Individual banks set their own operational limits for digital transfers. These limits may differ between savings and current accounts. Always verify directly with your bank, as limits are subject to revision.

SBI (State Bank of India) - Current Account Transfer Limits

Note: SBI offers free NEFT and RTGS for online transactions via YONO/internet banking. IMPS charges apply for certain transaction bands.

HDFC Bank - Current Account Transfer Limits

Note: HDFC Bank charges for IMPS vary by transaction amount - from Rs 3.50 + GST (up to Rs 1,000) to Rs 15 + GST (Rs 1 lakh to Rs 2 lakh). NEFT via internet banking is generally free. Confirm latest charges on HDFC's official website.

Other Banks - General Benchmark

All transfer limits above are for standard digital transactions. Current account holders with premium or corporate banking relationships may receive enhanced limits upon request.

Must Read: Bank Account Transaction Limit 2026

Penalties for Violating Current Account Transaction Rules

FAQs

What is the maximum cash deposit limit per day in a current account?

There is no single universal cap set by RBI for daily cash deposits in current accounts. Banks set their own counter limits (typically Rs 1–10 lakh per day). However, aggregate cash deposits of Rs 50 lakh or more per financial year trigger mandatory SFT reporting to the Income Tax Department.

What is the SFT reporting limit for current accounts in FY 2026-27?

Cash deposits or withdrawals of Rs 50 lakh or more in aggregate per financial year per bank trigger an automatic Statement of Financial Transactions (SFT) report to the Income Tax Department, which appears in your AIS.

When does a current account attract TDS under Section 194N?

For regular ITR filers, TDS at 2% applies on cash withdrawals exceeding Rs 1 crore in a financial year. For non-ITR filers (no ITR filed in the last 3 years), TDS at 2% applies above Rs 20 lakh and 5% above Rs 1 crore.

What is the new PAN rule for current account cash transactions in FY 2026-27?

Under the Draft Income Tax Rules 2026, PAN must be quoted when total cash deposits or withdrawals from all bank accounts exceed Rs 10 lakh in a financial year. This replaces the older rule of PAN for any single transaction above Rs 50,000 per day.

What is the UPI transfer limit for current accounts? 

The standard UPI daily limit is Rs 1 lakh per day, with a per-transaction cap of Rs 1 lakh. Certain categories (tax payments, healthcare, IPO) allow up to Rs 5 lakh per transaction. Banks like SBI and HDFC follow these NPCI-set limits.

Is there a difference between cash and digital transaction limits for current accounts? 

Yes. Cash transactions have SFT reporting thresholds, PAN requirements, and TDS implications. Digital transactions (NEFT, RTGS, IMPS, UPI) do not count toward cash SFT thresholds and have their own separate per-transaction and daily limits based on the payment mode and bank.

Can I receive more than Rs 2 lakh in cash in my current account? 

Technically, a bank will process the credit. However, receiving Rs 2 lakh or more in cash from a single person in a single day or for a single transaction/event violates Section 269ST and attracts a penalty equal to 100% of the cash received. This is one of the most critical compliance rules for businesses.

What is the RTGS minimum limit for current accounts?

RTGS transactions have a minimum limit of Rs 2 lakh - it is only for high-value transfers. There is no RBI-mandated upper cap, though individual banks may set their own ceilings based on account type.

Does splitting cash deposits across multiple banks help avoid SFT reporting? 

Each bank files an SFT based on its own accounts. Technically, Rs 30 lakh in SBI and Rs 30 lakh in HDFC may each stay below the Rs 50 lakh individual bank threshold. However, the Income Tax Department tracks all transactions via PAN across all banks. If the total appears disproportionate to declared income, scrutiny may still follow.

Is TDS deducted under Section 194N permanent? 

No. TDS under Section 194N is a tax credit, not a final tax. It can be fully claimed as a credit against your tax liability when filing your Income Tax Return (ITR) for the relevant financial year.