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Since Covid, the trend of digital transactions has increased a lot. But even now many people prefer to transact in cash. This is the reason why many people withdraw the entire month's expenses from the ATM in one go and many women still use the cupboard instead of the bank for their savings. But do you know what is the Income Tax rule regarding keeping cash at home? Let's know about this today.
How much cash can you keep at home?
First of all, let us tell you that you can keep as much cash as you want in your house. There is no restriction or ban on this. But now this question must be arising in your mind that does the Income Tax Department send a notice if you keep more than a limit of cash in the house? The answer to this question is no. But if a person comes under the scrutiny of the Income Tax Department, then he will have to tell what is the source of the money present in the house.
As per Income Tax rules, if you have any amount of money deposited at home
If there is a legitimate source, you will have to show its documents. That is, if the money is not earned illegally, then you do not need to panic at all. You just need to have complete documents to show where that money has come from.
The problem can arise when you are unable to give the correct account of the cash kept at home and the investigating agency can impose a heavy fine on you. Let us tell you that as per the Income Tax rules after demonetization, if undeclared cash is found with you during investigation, then up to 137 percent tax can be imposed on the amount of cash recovered from you.
The money deposited in case of tax evasion can be confiscated
Government agencies Income Tax Department, Central Board of Direct Taxes or CBDT and Enforcement Directorate i.e. ED keep an eye on people who have deposited black money. In such a situation, if the cash deposited with the person has been properly accounted for in the ITR, then that cash cannot be confiscated.
But if something is found wrong or the person is not paying tax or is evading tax, then under section 132 of Income Tax, these agencies can conduct raids and confiscate huge amount of cash recovered from his house.
according to the rules
If you withdraw or deposit more than Rs 50,000 from the bank at one time, you will have to show your PAN card. While shopping, you cannot make payment of more than Rs 2 lakh in cash. If you shop for more than Rs 2 lakh in cash, you will have to provide a copy of your PAN and Aadhar card.
