Cash Rules: If you make a purchase of more than Rs 2 lakh or deposit more than Rs 1 lakh, then you may have to answer to the Income Tax Department.
How much cash can a person keep in his house? What are the Income Tax Rules about holding cash? What if the Income Tax officials catch you with a lot of cash? Here are the Income Tax rules that you need to follow in order to file while keeping cash at home. If the Income Tax Department or other authorities seize a lot of cash from you, you need to inform them about the source of the money. You need to have valid documents to show your income. You also need to ensure that you have filed the proper income tax return.
According to the Central Board of Direct Taxes (CBDT), if you are unable to show the source of money, then the department can impose a penalty equal to 137 percent of the money recovered.
While storing cash you need to keep the following things in mind
- Cash transactions exceeding Rs 20 lakh in a financial year may attract a fine. If you have to deposit or withdraw more than Rs 50,000, you will have to give your PAN details to the bank.
- If a person deposits more than Rs 1,20,000, then he will have to submit PAN and Aadhaar Card.
- You cannot spend more than Rs 2 lakh in cash. If you buy an item that is more than Rs 2 lakh, you will have to provide your PAN card and Aadhaar card.
- A person who makes a payment of more than Rs 1 lakh using a credit-debit card may come under income tax scrutiny.
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