Cash Limit At Home : In India, there are many reports that the Income Tax Department raided a person’s house or office and recovered a large amount of cash and valuables.
In such cases, sometimes the cash is confiscated and sometimes the person is also arrested. This raises the question in people’s minds whether keeping a lot of cash at home is a legal offense? And how much cash can be kept at home?
Regarding this, tax and legal experts say that the Income Tax Department has not set any limit on how much cash can be kept at home. That is, you can keep any amount of cash at home, it is just necessary that the money is from a valid source. This should be mentioned in your Income Tax Return (ITR).
It is necessary to tell the source of cash
Sections 68 to 69B of the Income Tax Act provide for undisclosed income. If you fail to explain the source of your cash, it will be treated as undisclosed income and can attract heavy taxes and penalties.
Information should be in tax returns and records
The law does not say anything directly about the maximum limit of cash to be kept. But if someone has more cash than required and its source is not clear, then suspicion is bound to arise. In case of any investigation, you will have to prove the source of every rupee that it is valid and you have recorded it in your tax returns and accounts.
Up to 78% tax and penalty
If you fail to do so, that is, are unable to disclose the correct source of the cash, then that amount will be treated as undisclosed income and around 78% tax and penalty can be levied on it.
Advice to taxpayers and common people
If you are a trader, your cashbook should match your accounts. And even if you are not a trader, it is important to disclose the source of cash. So there is nothing to fear about keeping cash, just make sure that the money is earned honestly and its complete account is available.
