Income Tax Cash Limits – The Income Tax Department and ED raid homes if excess cash is kept in the house. But, there is no fixed limit on how much cash a person is allowed to keep in his house. However, if a huge amount of cash is found in someone’s house, whose source he is unable to explain, then it can be confiscated by the Income Tax Department-
You have heard it right that the Income Tax Department and ED raid homes for keeping excess cash. But, there is no set limit on how much cash a person is allowed to keep in his home. However, if a huge amount of cash is found in someone’s home, whose source he is unable to explain, then it can be confiscated by the Income Tax Department.
Apart from this, if the money is found to be linked to illegal activities, ED can also investigate and take legal action.
According to the Income Tax rules, there is no limit on keeping cash at home . You can keep as much cash as you want in your house. However, if an investigating agency ever catches it, you will have to disclose its legitimate source. If you have earned that money in a legitimate way, then no action is taken against you.
It is important to pay income tax-
If you keep a large amount of cash at home, you should have its legitimate source and related documents. Income tax should also be paid according to the income. On presenting these proofs before the investigating agency, no action will be taken against you. It is important to know these rules; lack of information can lead to heavy fines.
Penalty is imposed for not disclosing the legitimate source –
If a large amount of cash is found in your house and you do not disclose its legitimate source to the investigating agency, action can be taken against you. For this, the Income Tax Department charges a penalty of up to 137 percent of the amount of cash recovered from your house. This means that you may have to pay 37 percent more than the amount recovered in cash from your house.
Keep these things in mind in cash transactions-
It is important to know the rules for large cash transactions. It is mandatory to show PAN card for withdrawal or deposit of Rs 50,000 or more in the bank. While making purchases, payment of more than Rs 2 lakh cannot be made in cash; PAN and Aadhaar are required for this. Following the rules is important for legal and financial security.
Apart from this, if you deposit more than 20 lakh rupees in cash in your bank account in a year, you will still have to show PAN and Aadhaar to the bank.
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