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Income tax (Digital transactions have increased after COVID, but cash payments are still popular. Many people withdraw their monthly expenses from the ATM at once, while many women save their savings at home instead of the bank. But do you know what the Income Tax rule is regarding keeping cash at home? Let's know about that today.

How much cash can you keep at home?

There is no restriction on how much cash you can keep in your house. But now this question must be arising in your mind, whether the Income Tax Department notices come for keeping more than a certain amount of cash at home? 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 the source of the money present in the house. (How much cash can you keep at home?)

It is mandatory to show valid source documents of deposited money-

According to the Income Tax rules, if the cash deposited in your house has a valid source, then you do not need to panic. You just have to show the necessary documents to prove that the money was earned in the right way. That is, if you have proper proof of the source of the money, then there will be no problem.

Difficulties may increase if correct information is not given-

If you are unable to give an account of the cash kept at home, then the investigating agencies can impose a heavy penalty. According to the Income Tax rules since demonetization, if undisclosed cash is found with you, then up to 137 percent of the recovered amount can be taxed.

Deposited money can be confiscated for tax evasion-
Government agencies Income Tax Department, the Central Board of Direct Taxes or CBDT, and the Enforcement Directorate, i.e. ED, keep an eye on people who have black money deposited. If the account of cash deposited with the person is done properly in ITR, then that cash cannot be confiscated.

But if something is found wrong or that person does not pay tax or is evading tax, then these agencies can raid under Income Tax Raid Section 132 of Income Tax and confiscate huge amount of cash recovered from his house.

Other important things related to cash-
According to the new rules for banking and purchases, you will have to show your PAN card when withdrawing or depositing more than Rs 50 thousand in cash. At the same time, for cash purchases of more than Rs 2 lakh, you will have to give a copy of both PAN and Aadhar card.

Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.