Wealth tax on cash
This query is : Resolved
04 September 2013
dear sir,
Mr. A received 95 lakhs as a gift 3 yrs ago in cash on his marriage occasion. My query is if we have total cash on hand last 3 yrs then we have to pay wealth tax on that or not?
And one more is what is the maximum amount we have to deposit on minor bank ac? If we deposit on his acc is there any benifts for guardian or parents directly or indirectly. If we deposit excess is there any problem from IT dept.
Mr. A received 95 lakhs as a gift 3 yrs ago in cash on his marriage occasion. My query is if we have total cash on hand last 3 yrs then we have to pay wealth tax on that or not?
And one more is what is the maximum amount we have to deposit on minor bank ac? If we deposit on his acc is there any benifts for guardian or parents directly or indirectly. If we deposit excess is there any problem from IT dept.
04 September 2013
as per wealth tax act rs. 50000/- above amount include for wealth tax.
no limit for deposit cash in bank in a day
but at present every bank may fix limit for accepting the cash in bank and after that sum service charge charged from you.
moreover, income tax deptt. collect information from bank for deposit cash in a bank over one specified limit.
no limit for deposit cash in bank in a day
but at present every bank may fix limit for accepting the cash in bank and after that sum service charge charged from you.
moreover, income tax deptt. collect information from bank for deposit cash in a bank over one specified limit.
04 September 2013
thank u sir,
now we have to pay wealth tax on 95,00,000 for 3 years. IN what basis we have to pay.
now we have to pay wealth tax on 95,00,000 for 3 years. IN what basis we have to pay.
03 August 2025
Let's break this down clearly:
1. Wealth Tax on Cash (Rs. 95 Lakhs Gifted 3 Years Ago)
Wealth Tax Act Applicability:
Wealth tax is payable on net wealth as on the valuation date (usually 31st March of the relevant assessment year).
Cash Inclusion in Wealth Tax:
Under the Wealth Tax Act, cash held in hand exceeding Rs. 50,000 is included as an asset for wealth tax purposes.
Gift Received Earlier:
The gift received 3 years ago increases the cash in hand and thus the net wealth on the valuation date.
However, wealth tax is payable only on the net wealth as on the valuation date, not on the cumulative gifts received over years.
So, if on 31st March of any year, cash in hand exceeds Rs. 50,000, the amount exceeding Rs. 50,000 is included as part of net wealth.
You don’t pay wealth tax on Rs. 95 lakhs three times; rather, you pay on the cash in hand at the valuation date (and all other assets) if total net wealth exceeds exemption limit.
2. Maximum Amount to Deposit in Minor's Bank Account
No Legal Maximum Limit:
There is no statutory maximum limit for deposits in a minor’s bank account.
Bank Policies & Income Tax Compliance:
Banks may have internal limits on cash deposits for operational reasons or to comply with KYC/AML guidelines.
Tax Implications:
Deposits in a minor's account may attract scrutiny if the amounts are large or inconsistent with the minor's income sources.
Benefits for Guardian/Parents:
Parents/guardians cannot directly claim any benefit from the deposit since the account belongs to the minor.
However, income generated from minor’s assets is clubbed with the income of the parent whose income is higher, as per clubbing provisions under Income Tax Act.
3. Is There Any Problem with Excess Deposits?
If large deposits are not supported by proper documentation or legitimate sources, it can attract scrutiny under Income Tax Act.
Cash deposits above Rs. 10 lakhs in a day are reported to tax authorities under mandatory reporting rules.
Summary:
Point Explanation
Wealth Tax on cash Pay tax only if cash in hand > Rs. 50,000 on valuation date and net wealth exceeds exemption limit. Gifted amount not repeatedly taxed.
Deposit in minor’s bank account No legal max limit; bank may have internal limits.
Tax benefits to guardian/parents Income from minor’s assets clubbed with parent’s income. No direct benefit from deposits.
Excess cash deposits May attract tax scrutiny and reporting to IT dept.
1. Wealth Tax on Cash (Rs. 95 Lakhs Gifted 3 Years Ago)
Wealth Tax Act Applicability:
Wealth tax is payable on net wealth as on the valuation date (usually 31st March of the relevant assessment year).
Cash Inclusion in Wealth Tax:
Under the Wealth Tax Act, cash held in hand exceeding Rs. 50,000 is included as an asset for wealth tax purposes.
Gift Received Earlier:
The gift received 3 years ago increases the cash in hand and thus the net wealth on the valuation date.
However, wealth tax is payable only on the net wealth as on the valuation date, not on the cumulative gifts received over years.
So, if on 31st March of any year, cash in hand exceeds Rs. 50,000, the amount exceeding Rs. 50,000 is included as part of net wealth.
You don’t pay wealth tax on Rs. 95 lakhs three times; rather, you pay on the cash in hand at the valuation date (and all other assets) if total net wealth exceeds exemption limit.
2. Maximum Amount to Deposit in Minor's Bank Account
No Legal Maximum Limit:
There is no statutory maximum limit for deposits in a minor’s bank account.
Bank Policies & Income Tax Compliance:
Banks may have internal limits on cash deposits for operational reasons or to comply with KYC/AML guidelines.
Tax Implications:
Deposits in a minor's account may attract scrutiny if the amounts are large or inconsistent with the minor's income sources.
Benefits for Guardian/Parents:
Parents/guardians cannot directly claim any benefit from the deposit since the account belongs to the minor.
However, income generated from minor’s assets is clubbed with the income of the parent whose income is higher, as per clubbing provisions under Income Tax Act.
3. Is There Any Problem with Excess Deposits?
If large deposits are not supported by proper documentation or legitimate sources, it can attract scrutiny under Income Tax Act.
Cash deposits above Rs. 10 lakhs in a day are reported to tax authorities under mandatory reporting rules.
Summary:
Point Explanation
Wealth Tax on cash Pay tax only if cash in hand > Rs. 50,000 on valuation date and net wealth exceeds exemption limit. Gifted amount not repeatedly taxed.
Deposit in minor’s bank account No legal max limit; bank may have internal limits.
Tax benefits to guardian/parents Income from minor’s assets clubbed with parent’s income. No direct benefit from deposits.
Excess cash deposits May attract tax scrutiny and reporting to IT dept.
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