Navigating financial transactions is crucial to studying abroad, especially for international students. Understanding new rules for cash withdrawal from banks is important because banks closely monitor cash withdrawals and deposits of INR 10 lakhs and above. This can help you manage your money more efficiently and avoid unexpected fees.
Recent updates in cash withdrawal limits from ATMs and banks, effective from January 2022, aim to streamline transactions while keeping costs transparent. Let’s explore the new bank rules for cash withdrawals.
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New Rules for Cash Withdrawals from Bank
The new rules for cash withdrawals from banks introduce important changes regarding reporting requirements, daily transaction limits, withdrawal limits, and TDS deductions. International students must be aware of these regulations, as all international transactions must be made within limits and as per FEMA Act, 1999. Failure to comply with the new rules for cash withdrawal from ATMs and banks can lead to penalties.
Below are some key updates and changes that you should know to manage your transactions effectively.
Reporting Requirements– If you deposit INR 10 lakh or more in a savings account during a financial year, your bank is required to report this transaction to the income tax authorities. This rule ensures transparency and helps combat tax evasion.
Cash Withdrawal Limits Under Section 194N of the Income Tax Act, Tax Deducted at Source (TDS) applies to cash withdrawals exceeding certain thresholds:
- 2% TDS on amounts withdrawn over INR 1 crore if you have filed income tax returns for the past three years.
- 2% TDS on withdrawals exceeding INR 20 lakh, and 5% TDS on amounts over INR 1 crore for those who haven’t filed returns.
Daily Transaction Limits– You cannot receive more than INR 2 lakh in cash for a single transaction or linked transactions in one day. This limit aims to discourage large cash transactions and promote digital payments.
Importance of Documentation– If you deposit more than INR 50,000 in cash in a single day, you must provide your Permanent Account Number (PAN). If you don’t have a PAN, you’ll need to submit Form 60 or 61 as an alternative.
Penalties for Non-Compliance– Failure to establish the source of income for large cash deposits can lead to taxation at a higher rate. Additionally, penalties may apply for cash loans exceeding INR 20,000.
Also Read: This blog provides you with a list of all the banks that offer Debit Cards for Students who are under 18. Read to find the most suitable option!
Latest Cash Withdrawal Limits from Bank
Banks in India typically allow five free ATM transactions monthly, after which fees apply. Daily withdrawal limits vary by bank and card type, ranging from INR 40,000 to INR 3 lakhs. For international students accessing funds abroad, foreign ATM withdrawals come with additional flat fees and currency conversion charges. Check out the latest cash withdrawal limits below-
ATM Withdrawal Limits
Banks in India allow five free ATM transactions per month, including both financial and non-financial transactions. Beyond this, fees apply. Here’s an overview of the daily withdrawal limits and charges for major Indian banks-
| Bank | Debit Card Type | Withdrawal Limit (Daily) | Charges After Limit |
| SBI | Classic, Maestro Cards | INR 40,000 | INR 20 + GST per withdrawal |
| SBI Platinum International Card | INR 1,00,000 | ||
| HDFC Bank | Titanium Royale Debit Card | INR 75,000 | INR 21 + Taxes |
| JetPrivilege World Debit Card | INR 3,00,000 | ||
| ICICI Bank | Coral Plus, Sapphiro Debit Cards | INR 1,50,000 – INR 2,50,000 | INR 20 (financial); INR 8.50 (non-financial) |
| Axis Bank | Burgundy Debit Card | INR 3,00,000 | INR 21 |
Foreign ATM Transaction Fees
For students studying abroad, accessing money internationally can be expensive. Banks charge a combination of flat fees and a percentage of the transaction amount for foreign withdrawals. Different banks have different debit card foreign transaction fees. Check out the fees for some of the popular banks-
- SBI: INR 100 + GST + 3.5% of the transaction.
- HDFC: Minimum INR 125 + taxes.
- ICICI: Minimum INR 150.
- Axis Bank: INR 125 + currency conversion charges.
Also Read: Check some of the best Forex cards for students. Know some major bank-issued forex cards and those issued by online service providers.
How New Rules for Cash Withdrawal Help International Students
Understanding the latest rules for cash withdrawals and deposits is essential for international students managing their finances abroad. These guidelines ensure that you can handle tuition payments, daily expenses, and emergencies with ease while staying secure and avoiding unnecessary fees. Check out the benefits below-
- Paying Tuition Fees: Knowing how much money you can withdraw helps you pay for big expenses like tuition without any trouble.
- Managing Daily Expenses: Following ATM withdrawal rules makes it easier to cover daily costs like food, transport, and shopping.
- Planning for Emergencies: Understanding fees for using foreign ATMs helps you plan and keep money ready for unexpected situations.
- Staying Safe: Following the bank’s rules keeps your money secure and prevents fraud or unauthorized withdrawals.
This was all about the new rules for cash withdrawals from banks. By staying informed and proactive about these rules, you can navigate your financial journey abroad with confidence and ease.
FAQs on New Rules for Cash Withdrawals from Banks
The new rules require banks to report cash withdrawals exceeding INR 20 lakh in a financial year. TDS applies on withdrawals over specified limits, depending on tax return filings.
The maximum limit varies by bank and account type, typically allowing withdrawals up to INR 1 lakh per week from current accounts and INR 24,000 per week from savings accounts.
Yes, you can withdraw INR 10 lakhs, but be aware that it may trigger reporting requirements and TDS if your annual withdrawals exceed INR 20 lakh.
Yes, you can deposit INR 50 lakhs in your account; however, deposits over INR 10 lakh will be reported to income tax authorities as specified in financial transactions.
Cash withdrawals up to INR 20 lakh in a financial year are generally tax-free for individuals who have filed their income tax returns for the last three years.
To avoid TDS, ensure your annual cash withdrawals remain below INR 20 lakh if you haven’t filed income tax returns for the previous three years.
Yes, banks report cash withdrawals exceeding INR 20 lakh in a financial year as specified financial transactions to the income tax authorities.
Exceeding the cash withdrawal limit may lead to TDS deductions and reporting to income tax authorities, which could result in penalties if not properly documented.
Yes, failing to comply with cash withdrawal regulations can lead to penalties equivalent to the amount received in violation of the rules.
International students should stay informed about these new rules and plan their deposits and withdrawals accordingly to avoid unnecessary fees and compliance issues.
To learn more about education loans, the best bank accounts for students, forex, banking experience for global students, or international money transfers, reach out to our experts at 1800572126 to help ease your experience with studying abroad.
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