Cash Withdrawal Limits with Different Bank Accounts (Savings & Current) in a Financial Year

When we visit the bank or ATM to withdraw money, we often don’t think about how much cash we’re allowed to take out in a given period. But banks and the Income Tax Department set certain limits on cash withdrawals to promote digital transactions and prevent misuse of cash. After demonization in 2016 Indian government promote digital payment rather than cash payment. How ever we can withdraw money from atm and bank but there are certain rules and regulation that should we always keep in mind while cash transctions.

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10/7/20252 min read

worm's-eye view photography of concrete building
worm's-eye view photography of concrete building

Why Are There Cash Withdrawal Limits?

The government and banks put these limits to:

  • Encourage digital payments (like UPI, cards, and NEFT/RTGS).

  • Keep track of large cash transactions.

  • Prevent money laundering and tax evasion.

So while you can withdraw cash whenever you need, if you exceed certain limits, you might face TDS (Tax Deducted at Source) or additional scrutiny.

Cash Withdrawal from Savings Account

Savings accounts are meant for personal use — like salary deposits, daily expenses, or household spending.

🏧 ATM Withdrawal Limits:

Generally daily Atm Withdrawal limits depends on Debit Card Variant/ Types

  • Most banks allow ₹20,000 to ₹50,000 per day through ATMs, depending on your card type.

  • For example:

    • SBI Classic Card → ₹20,000 per day

    • HDFC Platinum Card → ₹50,000 per day

🏦 Cash Withdrawal from Bank Branch:

  • Usually, you can withdraw ₹50,000 to ₹1,00,000 per day at the branch counter.

  • If you need more, you can request it, but banks may ask for a reason or prior notice (especially for large amounts).

    Annual Limit for Tax Purposes:

As per Income Tax Rule (Section 194N):

  • If total cash withdrawals in a financial year exceed ₹1 crore, the bank will deduct TDS @2% on the amount exceeding ₹1 crore.

  • For individuals not filing income tax returns, the limit is ₹20 lakh, and TDS is 2% or 5%, depending on the total withdrawal.

Cash Withdrawal from Current Account

Current accounts are used by businesses and firms for daily transactions — so their cash needs are higher.

Bank Counter Limit:

  • Most banks allow ₹1 lakh to ₹5 lakh per day for cash withdrawal at the branch.

  • Some premium business accounts may have even higher limits.

ATM Withdrawal Limit:

  • Usually ₹50,000 to ₹1 lakh per day, depending on card type.

Annual Limit for Tax Deduction:

  • Same rule applies under Section 194N:

    • TDS @2% if total cash withdrawals exceed ₹1 crore in a financial year.

    • If you haven’t filed your ITR, TDS applies once you withdraw over ₹20 lakh in a year.

Example to Understand

Let’s say you have a current account for your shop.

  • You withdraw ₹90 lakh during the year → No TDS.

  • But if you withdraw ₹1.10 crore → TDS @2% will be deducted on ₹10 lakh (i.e., ₹20,000).

If you don’t file ITR, and withdraw ₹25 lakh → TDS will apply on ₹5 lakh.

Tips to Avoid TDS and Stay Within Limits

✅ Use digital payment methods for large transactions.
✅ Withdraw only the amount you actually need in cash.
✅ File your income tax return (ITR) regularly — this gives you higher withdrawal limits.
✅ Keep a record of your cash withdrawals, especially if you run a business.

Final Words

Cash is convenient, but digital transactions are safer, faster, and cleaner.
Knowing your cash withdrawal limits helps you avoid tax deductions and unnecessary trouble — and it encourages better money managemen