How much cash can a person keep inside his/her house? What are the income tax rules about keeping cash?
What will happen if the income tax officials catch you with a lot of cash? Here are the income tax rules that you have to follow to file keeping cash at home.
If the income tax department or other authorities catch up with a lot of cash, you will have to tell them about the source of the money. You should also have valid documents to show the income. You should also make sure you have filled your proper income tax returns.
According to the Central Board of Direct Taxes, if you are not able to show the source of the money, the department can impose a fine equal to 137 percent of the recovered money.
Here are some important things you have to keep in mind while storing cash.
There can be a fine if you do a cash transaction more than Rs 20 lakh in a financial year. If you have to deposit or withdraw more than Rs 50,000, you need to furnish your PAN details to the bank.
If a person deposits more than Rs 1,20,000, he/she would have to submit PAN and Aadhaar cards.
You can’t spend more than Rs 2 lakh in cash. If you buy something that is more expensive than Rs 2 lakh, you will have to furnish your PAN card and Aadhaar card.
A person who pays more than Rs 1 lakh using credit-debit cards may come under income tax scanner.
Under the rule, you musn’t take cash more than Rs 2 lakh from your friend or relatives. If you do, you will have to use the bank’s channels.
You will have to pay TDS if you withdraw more than Rs 2 crore in cash from any bank.