In India, home loan borrowers must navigate specific cash deposit rules to avoid attracting income tax notices. Under Section 269ST of the Income Tax Act, individuals can deposit cash amounts below ₹50,000 without needing to provide their Permanent Account Number (PAN). However, any cash deposit exceeding ₹2 lakh in a single transaction is subject to a 100% penalty. Additionally, the total cash deposits across all accounts must not exceed ₹10 lakh within a financial year, as exceeding this limit will trigger a Statement of Financial Transactions (SFT) report to the Income Tax Department. Experts suggest that borrowers should avoid direct cash deposits into their home loan accounts and instead deposit cash into their savings accounts first, facilitating easier tracking and income tax return (ITR) filing. This strategic approach helps maintain clarity regarding the source of funds, reducing the risk of scrutiny by tax authorities.