Cash Rules: 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 black money deposited.
Since Covid, the trend of digital transactions has increased a lot. But even now many people prefer to do transactions in cash. That is why many people withdraw the entire month’s expenses from the ATM in one go and many women still use their 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 that 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 prohibition on this. But now this question must be arising in your mind that does one get a notice from the Income Tax Department if one keeps more than a limit of cash in the house? The answer to this question is no. But if a person comes under the scanner of the Income Tax Department, then he will have to tell what is the source of the money present in the house?
Also Read: NPS Contribution Rule: PFRDA has implemented T+0 settlement under NPS from July 1
It is mandatory to show valid source documents of the deposited money
According to the Income Tax rules, if you have a valid source of money deposited at home, then you will have to show its documents. That is, if the money is not earned through illegal means, then you do not need to panic at all. You just need to have complete documents to show where that money has come from.
Difficulties may increase if correct information is not given
If you are unable to give the correct account of the cash kept at home, then the investigating agency can impose a heavy fine on you. Let us tell you that as per the income tax rules after demonetization, if undisclosed cash is found with you during investigation, then up to 137% tax can be imposed on the amount of cash recovered from you.
Deposited money can be confiscated for tax evasion
Government agencies like Income Tax Department, Central Board of Direct Taxes or CBDT and Enforcement Directorate i.e. ED keep an eye on people who have black money. If the cash deposited with the person is properly accounted for in ITR, then that cash cannot be confiscated.
But if something wrong is found or the person is not paying tax or is evading tax, then under Section 132 of the Income Tax Act, these agencies can conduct a raid (Income Tax Raid) and seize a huge amount of cash from his house.
Other important things related to cash
According to the rules, you will have to show your PAN card when you withdraw or deposit more than Rs 50,000 at a time from the bank. You cannot make a payment of more than Rs 2 lakh in cash while shopping. If you shop for more than Rs 2 lakh in cash, you will have to provide a copy of your PAN and Aadhaar card.
