New Delhi: To eliminate problems like tax evasion or black money, there are many rules regarding cash and transactions in the country. One of the fundamental questions is whether there is a limit to how much cash can be kept in the household. Keeping cash at home depends on two things, first is your financial capacity and second is your transaction habit. If you keep a large amount of cash at home, then understand the rules so that you do not have to face any problems. let’s know
Income tax rules for keeping cash at home
There is no rule that you can keep cash at home up to a certain limit. No rule compels you to keep a limited amount of cash at home. That is, you can keep as much cash at home as per your capacity. However, there is only one rule to remember and that is what is your source of income and whether you have paid tax or not. You can keep any amount of cash in your house as per income tax rules, but if the investigating agency catches you, then you have to disclose its source. If you have earned that money legally and have complete documents or have filed an income tax return then there is no need to panic. But if you are not able to tell the source then Income Tax Department can take action against you.
When does Income Tax Department impose a penalty?
If you do not give cash information to the Income Tax Department, then your difficulties may increase. The income tax department raided your house and seized a huge amount of cash. Also, if you do not give correct information about that cash, then you may have to pay a heavy fine. You may be taxed on cash withdrawals up to 137% of that amount. Overall, the cash saved by you will be gone, but you will also have to pay additional tax on it.
Keep these things in mind while making big deals
Big deals like house-flat, car, or marriage often have to be done, so some things should be kept in mind before making such deals. You will need to show your PAN card to withdraw or deposit more than Rs 50,000 at a time. Also, it is not possible to make a payment of more than 2 lakhs in case of purchase and here also you need PAN and Aadhaar. Also, if you deposit more than Rs 20 lakh cash in your bank account in a year, you will need to show your PAN and Aadhaar at the bank. If you withdraw more than Rs 2 crore from the bank, then you will have to give TDS certificate. Whereas buying and selling property worth more than Rs 30 lakh in cash can bring a person on the radar of investigative agencies.
