Bank Transaction Limits in India For FY 2026-27: With BSBDA and PPF Update!

There is no fixed limit set by the Income Tax Act or RBI on the money you can keep in a bank account. But all funds in the account must be explainable based on declared income history shown in ITRs, unexplained amounts are treated as unexplained income (similar to black money), which can attract heavy penalty under Income Tax provisions. 

Cash Deposits in Saving or Current Accounts

For Saving Accounts : You can deposit ₹10 lakh per financial year per bank or PAN. Exceeding this, banks report to the Income Tax Department as SFT.

For Current Accounts : For current account, limits are significantly higher to support business operations. However large transactions are monitored with declared turnover. The limit is up to ₹50 lakh per financial.

Deposits below these are fine but still require source explanation if queried, exceeding prompts notices asking for proof, with unproven amounts taxed heavily. Limits apply bank-wise, so multiple accounts allow strategic splitting.

Cash Withdrawals from Saving or Current Accounts

Cash withdrawals over ₹10 lakh from savings account or ₹50 lakh from current account per financial year per bank trigger SFT reporting, similar to deposits. 

TDS on Large Cash Withdrawals from Banks

Beyond SFT (>₹10 lakhs triggers report), TDS (Tax Deducted at Source) applies on high withdrawals. 

• If ITR Filed last 3 years: 2% TDS on amounts over ₹1 crore 
• If No ITR Filed (previous 3 assessment years): 2% TDS over ₹20 lakh - ₹1 crore and 5% TDS above ₹1 crore.

You can claim this TDS as refund during ITR filing. 

Digital Transaction Limits: UPI, IMPS, NEFT, RTGS

Other Cash Transaction Limits

Rules to avoid 100% penalties or disallowances:

• Cash Sales (Business): <₹2 lakhs per person per day. 
• Property Transactions: <₹20,000 cash. 
• Loans/Repayments: <₹20,000 cash. 
• Business Expenses: <₹10,000 per person per day. 

Limits On The Number of Bank Accounts

RBI or Income Tax impose no limit on the total bank accounts but you must maintain minimum balance in each and report all in ITR or ₹10,000 penalty if omitted. For GST-registered business and professionals, all bank accounts linked to the business must be updated on the GST portal.

BSBDA Zero Balance Account Scheme: Effective April 2026

The Basic Savings Bank Deposit Account (BSBDA) is designed to promote financial inclusion with simplified features. RBI's BSBDA scheme eliminates minimum balance requirements starting April 2026. 

No Minimum Balance

Complete exemption from maintaining any minimum monthly average balance (MAB). No penalties for zero balance.

Free RuPay Debit Card

Account holders are issued a basic RuPay debit card free of annual maintenance charges for ATM access.

Limited Free Transactions

Typically allows 4 free withdrawals per month (including ATM). Beyond this, transactions may be chargeable.

Inclusive Access

Specifically targeted at low-income individuals to bring them into the formal banking system with minimal barriers.

Other Benefits

You can open or convert the existing accounts to BSBDA. 

All basic facilities must be enable by bank such as - net banking, debit card, SMS alerts, transactions, email, cash/ATM withdrawals.

Applies to all banks i.e., public or private — major relief for private banks with high min-balance penalties.

Restriction is one BSBDA per person at a time. 

Note:

Even in Zero Balance accounts, transaction monitoring still applies. High-value deposits inconsistent with profile will trigger income tax alerts.

PPF Transfers: Upcoming UPI Integration

Soon, PPF account holders will be able to transfer funds directly to their bank accounts using UPI. This feature is expected to launch around March or April 2026, making withdrawals faster, easier and fully digital, without visiting a bank branch.