Income Tax has not set any limit for any person to keep cash at home. Any person can keep as much cash as he wants in his house, but if caught by the investigating agencies, it is important to tell about its legitimate source.
New Delhi. You must have heard about the raid by Income Tax Department and ED on keeping excess cash at home. We often hear about such incidents in the news. This may raise a question in your mind that what is the maximum amount of cash a person is allowed to keep in his house. If a lot of cash is found in someone’s house, what action is taken against him? Here we are going to tell about this.
According to 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 ever the investigating agency catches it, you will have to reveal its legitimate source. If you have earned that money legitimately then no action is taken against you.
It is necessary to pay income tax
If you keep a large amount of cash at home, then it is important that you have its valid source as well as documents related to it. Your income tax should also be paid as per your income. If you present this evidence before the investigating agency after being caught in excess cash, then no action can be taken against you. It is important for you to be aware of these rules. If you do not have information, you may have to pay a heavy fine.
Penalty for not disclosing valid source
If you find excess cash at home and do not tell the investigating agency about its legitimate source, 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 during cash transactions
Whenever you make big transactions in cash, it is important for you to be aware of its rules. Let us tell you that for withdrawal or deposit of Rs 50,000 or more at a time in the bank, you have to show your PAN card. At the same time, while making purchases, payment of more than Rs 2 lakh cannot be made in cash. For this also you will have to show PAN and Aadhaar. Apart from this, if you deposit more than Rs 20 lakh in cash in your bank account in a year, even then you will have to show PAN and Aadhaar in the bank.
